Hybridised Systems – The Future of Banknotes?

At the recent Digital Document Security Online conference, held at the end of March, Sina Gebrodt, a final-year student at the Design Academy Eindhoven, reported on the project that she and Madison Bucher, a user-experience designer, had undertaken on the future of banknotes. This project was sponsored by Koenig & Bauer Banknote Solutions (K&B).

Gebrodt and Bucher set out to establish whether banknotes have a future and, if so, what will be required of them. They conducted interviews with 47 people in their twenties at the Pasadena ArtCenter College of Design (California), identifying two key ‘pain points’ for this group: these are the fear of losing cash or being robbed of it, and the stress of using ATMs. They concluded that if these pain points could be overcome, this generation would be more inclined to continue to use banknotes.

The solution they arrived at is to ‘empower users’ by making it possible to deactivate and then reactivate banknotes. In other words, to transfer the value of the banknote to some other form of monetary storage, such as a bank account (deactivation), then reactivating the note by reversing this transfer. A deactivated note would have no intrinsic value so that it wouldn’t be an issue for the holder if it were lost or stolen.

In the solution they devised, with input from K&B, this would be achieved by using a smartphone app and the near-field communication facility of the phone. A small, very thin NFC chip in the banknote will be the point of communication with the phone, which in turn will connect to the bank to check its validity before transferring the note’s value to the designated account or back again – ie. to deactivate or reactivate the note.

As conceived, there would also be a visual cue of the state of the note, in the form of an electrochromic ink that could show or hide, say, the note’s denomination; if it can be seen that this is, say, a €20 note, it is activated; if that can’t be seen, the note is worthless paper.

In this scheme it would be up to the holder to choose whether or not to seek the peace of mind of deactivation. The default state of the issued note would be active, so that the holder has to open the app, making a clear decision to deactivate the note.

The banknote thus becomes a hybrid system; it has a physical, tangible, presence, but it also has the ability to interact with the digital world to lose or restore its value.

Ms Gebrodt postulated a 15-year or more timeframe for this to become reality, although most of the means to do so is available now.