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Banknote processing

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Banknote processing is an automated process to check the authenticity features and the fitness of banknotes in circulation, to count and sort them by denomination and to balance a deposit. This processing of currency is mainly performed by security printing companies, central banks, financial institutions and cash-in-transit (CiT) companies.

Cash Cycle

The cash cycle is driven by coins for lower values and banknotes for higher values (called denominations). The central bank orders the banknotes from security printing companies and stocks them. To get banknotes, financial institutions raise a credit at the central bank with paying interests and depositing securities. On request of their customers they pay them out over the bank counter or cash dispensers (ATM) and put them into circulation. After paying at cash registers of retail or gas stations, vending machines (e.g., cigarettes, tickets, drinks) or depositing in ATMs the cash is returend to the financial institions. In most cases, CiT companies pick up the cash receipts by armored cars and refill the cash dispensers.

Depending on the currency the cash cycle is regulated and structured differently. Some central banks (e.g., the Bank of England or the Reserve Bank of Australia) delegate their tasks for maintaining the fitness and checking of authenticity to the financial institutions and accept only unfit banknotes to be deposited. Otherwise they may charge a penalty or a fee. The European Central Bank (ECB) stipulates that the financial institutions may always return the banknotes as standardized units (bundles of 1,000 banknotes, sorted by denomination, banded as packages of 100 banknotes) without checking them for the fitness level. The Deutsche Bundesbank (DBB) even accepts unsorted banknotes as "multi-denomination deposit" for a moderate fee independent from the amount of the payment.[1] This attractive offering supports a high quality of the cash in circulation and the reliable and early detection of counterfeit money all over Germany. The National Bank of Belgium, the Oesterreichische Nationalbank with its participation in Geldservice Austria (GSA) and the Central Bank of Luxembourg[2] apply similar models of the optimized cash cycle.

The central banks define the conditions for the recirculation of fit banknotes by the financial institutions. The ECB, with its Decision on the authenticity and fitness checking and recirculation of euro banknotes (ECB/2010/14), defines a minimum standard for the recirculation of euro banknotes by financial institutions and other professional cash handlers.[3] This includes the verification of authenticity and sufficient fitness level by certified banknote processing machines. Damaged and soiled banknotes must be returned to the national central bank. Suspect counterfeit money must be handed over to the competent national authorities.

History

Counting machines

First mechanical means for the sorting and counting of banknotes existed in the 1920s already. In 1916, the USA granted the patent Machine for Assorting and Counting Paper Money.[4] The machine offered several slots for feeding banknotes according to the sorting by the operator and used mechanical counters. It was used as Federal Bill Counter by the Federal Reserve System over several decades.[5]

From 1957, the British De La Rue marketed the first counting machine based on spindle principles.[6]

Sorting machines

When microelectronics became available at the end of the 1960s the development of sorting machines started to check the authenticity and fitness of banknotes in one step. First prototypes were developped by Toshiba in Japan, by Crosfield Business Machines under the guidance of John Crosfield in the United Kingdom, by Società di Fisica Applicata (SFA) in Italy, and by Gesellschaft für Automation und Organisation (GAO), a subcompany of Giesecke+Devrient (G+D), in Germany under the guidance of Helmut Gröttrup. In 1976 the US company Recognition Equipment Inc (REI) joined.[7] The demand was driven by the central banks, mainly Bank of Japan, Banca d'Italia, De Nederlandsche Bank and the German Deutsche Bundesbank. The sorting machines of the first generation achieved a processing speed of 4 up to 20 banknotes per second. In many cases they were built on the technology of punched cards or mail sorting or used synergies in manufacturing such machines.

The model ISS 300 of G+D was a product of the first generation and designed as a semi-automatic machine. It sorted the banknotes of a preselected denomination by authenticity and fitness, achieved a processing speed of 8 banknotes per seconds and was introduced by the Deutsche Bundesbank in 1977.[8] It was manufactured until 2000 and set a world-wide reference of banknote processing systems with more than 2,100 sold systems to 67 countries. In 2006, an early machine was exhibited in the Deutsches Museum to demonstrate pattern recognition as an early application of information technology.[9]

From 1985, the progress of microelectronics on base of microprocessors enabled banknote processing systems with a processing speed of up to 40 banknotes per second with fully automated functions of debanding, banding, bundling and online destruction by a paper shredder. The BPS 3000 from G+D was a second generation machine which dominated the market as fully automatic machine after achieving a large order from the US Federal Reserve in 1990 and replaced the 'Currency Verification and Counting System (CVCS) from REI.[10] The Deutsche Bundesbank and further central banks followed. As variant BPS 2000 OBIS it became a world-wide standard for the final quality inspection of single notes in banknote printing works.[11]

Functions of banknote processing

The machines for banknote processing offer different levels of automation with a processing speed of up to 44 banknotes per second.[12]

Automated feeding

With the highest automation level the banknotes are automatically fed to the singler by using the following principles:

  • Feeding of printed sheets of paper with up to 60 banknotes in security printing into a cutting system and subsequent filling of circulating carriers with up to 1,000 loose banknotes each
  • Feeding of loose banknotes from standardized trays[13]
  • Feeding of packaged banknotes by automated opening of parcels and bundles (e.g., a carton or a shrink wrapped parcel of 10 bundles with 10 packages of 100 banknotes)
  • Debanding of the packages by cutting and removing the currency straps

Singler

Quality of banknotes in circulation in Nigeria (2000)

The singler pulls single banknotes from a stack. Simple machines are using the friction principle (friction singler), grip them at the long edge and transport, and evaluate and sort them by a short-edge transport. High-speed machines additionally use compressed air and suction, grip the banknotes at the short edge (long-edge transport) and bring them within milliseconds to a speed of up to 11 m/s (approx. 40 km/h or 25 miles/hour). This banknotes are accelerated by more than 500-fold earth gravity (i.e., >5,000 m/s²).

A special challenge is the singling of banknotes with poor quality, e.g., due to limpness, soiling, mechanical defects, glued by adhesive tape or chewing gum, often distorted by long storage, or high moisture.

By using separator cards or header cards, different deposits can be accounted separately without interrupting the singling.

Detectors

The detectors check each single banknote for the following features:

  • Detectiing the denomination, series and orientation, e.g., distinguishing euro banknotes between series ES1 and ES2
  • Reading the serial number for statistical purposes, if applicable for the search of blackmail money
  • Checking the authenticity of banknote based on machine-readable security features
  • Determining the fitness for recirculation by evaluating soil, stains, ink wear, and mechanical damages (e.g., tearing, holes, adhesive tapes, dog ears, missing parts, fold, crumpling, limpness)
  • Detecting dyed banknotes which were neutralized by an Intelligent Banknote Neutralisation System (IBNS), e.g., when a stolen ATM cassette was opened without authorization[14]

Optical and other physical mesauring systems are used to detect these characteristics. Seucrity features of banknotes are strictly covert with regard to composition and detection principles.

Zur Messung der Eigenschaften werden optische und andere physikalische Messverfahren eingesetzt. Echtheitsmerkmale von Banknoten unterliegen der strikten Geheimhaltung hinsichtlich ihrer Zusammensetzung und ihres Nachweises.[15]

Banknotes which cannot be verified as genuine are rejected to a special output pocket for manual inspection. This also applies for multiple items if the singler pulls more than one banknote at once. The machine operator can refeed them to the singler or check the human-readable authenticity features.

Stacking and packaging

The processed banknotes are output to various stackers depending on the evaluated category. In general stackers with spiral slots are used to receive the banknotes, decelerate them on shortest distance (<200 mm) and stack them.

Depending on the degree of automation the stacking may comprise the following steps:

  • Separation (sorting) by denomination, series, orientation and fitness level (optionally including differentation for ATM fitness and standard fitness for circulation)
  • Counting and stacking as loose banknotes
  • Transfer of loose banknotes into special trays
  • Banding as output packages with 100 banknotes. The strap is 25 to 40 mm wide and is printed with processing data. As strapping requires some time two alternating stackers (tandem operation) are assigned to one sorting category.
  • Pre-packaging of bundles with 5 or 10 output packages for a unit of 500 or 1,000 banknotes, optionally with a label printed with processing data
  • Bundling of the units by a packaging machinery with using shrink wrap or vacuum packing. This procedure protects the banknotes from soil and dirt and prevents the theft of single banknotes.
  • Aggregation of 4 to 20 bundles with using shrink wrap or carton
  • Automated palletizing on a pallet by a robot

Destruction

The destruction of unfit or recalled banknotes is a responsibility of the central bank. In general, the destruction is performed by a shredder. The machine cross-cuts the banknotes to particles (shreds) with an area of less than 25 mm². This work process is executed under very high security provisions to preclude manipulation of authenticity detection and counting. Optionally, digital signatures are used to protect the application software and transmission of counting data.

In a second stage the shreds are collected by a special suction system and briquetted to reduce the volume. The briquettes may be disposed of in a landfill of burnt for heat generation. Some central banks offer shreds as a popular souvenir.

Market and manufacturers

Since 1995 the offering of banknote processing machines has been differentiated to the following product classes:

  • Modular high-speed systems with a high degree of automation and a processing speed of more than 20 banknotes per second with up to 20 output stackers for the concurrent processing of mixed denominations (multi-denomination processing) or mixed currencies
  • Modular desktop systems for mid-range performance (mainly used by cash centers of CiT companies and financial institutions)
  • Compact tabletop systems with up to 4 output stackers for the use in the back office of a retail or commercial bank branch
  • Simple tabletop systems for the cashier for counting and low-level authenticity verification (no sorting)

The preeminent market leader for high-speed systems is the German Giesecke+Devrient (G+D)[16], followed by the Japanese Toshiba[17] and the British-American Cash Processing Solutions (CPS)[18][19] with low market shares.

The Japanese Glory[20], followed by G+D and many Chines, Korean and Japanese suppliers.

Super-large cash centers have a capacity of processing upt to 20 million banknotes per day. They are protected by the highest security provisions to protect from heists. The world-wide largest cash canters are:

Banknote processing is a special application of document processing for currency based on security paper or polymer. Therefore some manufacturers tried adapting existing technology for banknote processing, especially for the singling and image scanner. Such applications comprise:

  • Punched card sorter: Reading of binary encoded information and sorting of ounched cards, see also Hollerith machines
  • checks: Reading of checks (or cheques) by magnetic ink character recognition (MICR) and sorting for the related financial institution. In 2000, the US Federal Reserve System processed more checks (approx. 40 billion per year) than banknotes. Since 2003, with Check 21 Act, the full image scanning of checks is used and physical return if the checks to the related financial institution is no longer necessary.[25]
  • Vouchers and coupons: Reading of documents with a defined value, mainly used in casinos and retail. In some countries food coupons were used to subsidize the deserving poor.
  • Medical prescriptions: Scanning and reading of printed documents for central accounting with health insurance companies

Mail sorting: Reading of the address of letters and sorting by the postal code. Modern systems are capabel to sort the letters according to the detailed sequence of destinations for the distribution by the mailman.

Meanwhile these applications are differentiated because the requirements for banknote processing are quite special. Only Toshiba is offering banknote processing and mail sorting machinery from the same division.[26]

Patents

Die erste maßgebliche Patentanmeldung in Europa erfolgte durch die italienische Societá di Fisica Applicata (SFA) am 31. Mai 1972 als „Automatische Sortiermaschine für gebrauchte Banknoten“. Sie beschrieb umfassend Vorrichtungen zur Erkennung von Fälschungen (u. a. durch Erkennung von Wasserzeichen, Fluoreszenz und Stahldruck) und der Feststellung des Abnutzungszustands durch Vergleich mit einer Musterbanknote, sowie die Lesung der Seriennummer.[27] SFA baute die Maschine „Selenota“, die in Italien und Spanien bis Anfang der 1980er Jahre eingesetzt wurde. Die Anmeldung, für die die USA am 26. März 1974 das Patent US 3,800,155 erteilten, war aufgrund ihrer unspezifischen Ansprüche leicht umgehbar und hatte wenig Auswirkung auf die Marktentwicklung.

In den USA baute die Firma Cummins-Allison in den 1990er Jahren einen umfassenden Patentschutz für Tischgeräte auf, u. a. durch die Kombination von Quertransport mit einer Bearbeitungsgeschwindigkeit von mehr als 800 Banknoten pro Minute. Sie verklagte 2003 die Wettbewerber Glory[28] und die koreanische Shinwoo[29] wegen Patentverletzung zu Strafzahlungen mit zig Millionen Dollar. Damit konnte Cummins-Allison den US-Markt bis zum Ablauf ihrer Patente im Jahr 2017 weitgehend vor Wettbewerbsprodukten bei Tischgeräten schützen.

Inzwischen sind die wesentlichen Basispatente in allen Produktklassen abgelaufen, so dass Hersteller aus China und Russland[30] mit kopierter Technologie in den Markt der Hochgeschwindigkeitssysteme einzutreten versuchen, allerdings bisher mit geringem Erfolg aufgrund von Qualitätsmängeln.

Literatur und Medien

  • Martin Suter (2015-02-25), Montecristo (in German), Zürich: Diogenes, (308 pages), ISBN 978-3-25706920-4 {{citation}}: Unknown parameter |Comment= ignored (help)
  • Dokumentarfilm Tonbridge Securitas Heist zum Raubüberfall auf das Cash Center des Werttransportunternehmens Securitas in Tonbridge, Kent, mit einer Beute von 53,1 Mio. Pfund im Jahr 2006[31]
  • Actionfilm Criminal Squad mit einem fiktiven Überfall auf einen Geldtransport und die Federal Reserve Bank in Los Angeles. Er zeigt Szenen der Banknotenbearbeitung, die nicht der Arbeitsweise der FRB entsprechen.[32]

Siehe auch

Einzelnachweise

  1. ^ "Kundenbroschüre: Barer Zahlungsverkehr für Bargeldgeschäftspartner" (PDF). Deutsche Bundesbank (in German). 2020-03-01. Retrieved 2022-03-26.
  2. ^ "Automated banknotes' treatment at the BCL". Banque Central du Luxembourg. Retrieved 2022-03-05. detailed description of multi.denomination processing by BPS M7 from G+D with 33 banknotes per second and 16 stackers
  3. ^ "Banknote recirculation by credit institutions and other cash handlers". European Central Bank. 2022-01-01. Retrieved 2022-03-26.
  4. ^ US 0 
  5. ^ "Operations Evolution" (PDF; 561 kB). FRB Cleveland. 2012-01-01. Retrieved 2022-02-27.
  6. ^ "Our 200 year heritage". De La Rue. Retrieved 2022-02-27. In 1957 De La Rue first marketed a banknote counting machine. De La Rue Instruments was later formed to run this line.
  7. ^ "Computer History Automated Check Processing 1989 Federal Reserve Bank". FRB of St. Louis. 1989. Retrieved 2022-03-03. from 4:30 min the REI CVCS is shown; the Federal Bill Counter from 5:10 min; check processing from 7:50 min
  8. ^ "Falschgeld" (PDF; 308 kB) (in German). Der Spiegel 6/1977. 1977-01-31. Retrieved 2019-05-16.
  9. ^ Hartmut Petzold (2007). "Jahresbericht 2006" (PDF; 4,24 MB) (in German). Deutsches Museum. p. 24. Retrieved 2019-07-23.
  10. ^ "First Look inside the Federal Reserve". 2013-03-24. Retrieved 2022-03-03. from 26:30 min the BPS 3000 is shown in operation at FRB of New York, EROC
  11. ^ "Banknote printing and coin minting". Banco de México. 2011-01-01. Retrieved 2022-03-03. manufacturing of banknotes with final inspection and packaging. Cutting from 6:30 min, final inspection with BPS 2000 OBIS at 6:37, packaging at 7:15 min
  12. ^ "BPS X9: Qualitätsprüfung in Hochgeschwindigkeit für Druckereien". Giesecke+Devrient. Retrieved 2022-03-28.
  13. ^ "BPS M7: Höchste Sicherheit und Effizienz in der "Highspeed-Welt"". Giesecke+Devrient. Retrieved 2022-03-28.
  14. ^ "Ink-stained banknotes". European Central Bank. 2022. Retrieved 2022-04-15.
  15. ^ Bender, Klaus (2006). Moneymakers: The Secret World of Banknote Printing. Weinheim: Wiley-VCH. ISBN 978-3527502363.
  16. ^ "High-performance banknote processing systems". 2022-04-16.
  17. ^ "Banknote Processing Machine". Toshiba. Retrieved 2022-03-05.
  18. ^ "Sorting Solutions". Cash Processing Solutions. Retrieved 2022-03-05.
  19. ^ The CPS products are based on the technology of Recognition Equipment Inc. (REI), which was acquired by Currency Systems International (CSI) in 1990, by De La Rue in 2002 and divested to CPS in 2016
  20. ^ "Glory Solutions: Hardware, Software, Professional Services and Maintenance". Retrieved 2022-04-16.
  21. ^ "Currency Processing and Destruction". cryptome.org. 2005-05-13. Retrieved 2022-03-04.
  22. ^ The Bank of Japan in Our Daily Lives (Motion picture). Bank of Japan. Retrieved 2022-04-02. at around 5:00 the video shows the processing by Toshiba BN-150 systems
  23. ^ "P-Behälter". Retrieved 2022-03-04.
  24. ^ "Deutsche Bundesbank-Filiale in Dortmund. Footage-Video". Deutsche Bundesbank. 2021-07-02. Retrieved 2022-03-04.
  25. ^ "Frequently Asked Questions about Check 21". 2013-08-06. Retrieved 2022-03-04.
  26. ^ "Security and Automation Systems". Toshiba Infrastructure. Retrieved 2022-03-04.
  27. ^ US 0 
  28. ^ "CUMMINS-ALLISON CORP v. GLORY LTD., Glory Shoji Co., Ltd., and Glory (U.S.A.), Inc" (PDF). 2006-10-13. Retrieved 2022-03-04.
  29. ^ "U.S. Court of Appeals for the Federal Circuit Court Upholds Cummins Allison Patent Infringement Lawsuit against SBM Co., LTD and Amro-Asian Trading Company". 2012-06-06. Retrieved 2022-03-04.
  30. ^ "Goznak has developed a counting and sorting machine "BARS S5" of a new class". 2022-01-10. Retrieved 2022-03-04.
  31. ^ "Britain's Biggest Heists - Tonbridge Securitas Heist". 2021-09-07. Retrieved 2022-03-05.
  32. ^ "Criminal Squad (Trailer)". 2018. Retrieved 2022-03-05. Bei ca. 1:15 min sieht man Szenen der Banknotenbearbeitung mit BPS 200 von G+D, die nicht bei der FRB eingesetzt wird.
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