New coins causing headaches for vendors

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Ralph Burokas says machines can't read the coins after the metal content changes. (TREVOR HAGAN / WINNIPEG FREE PRESS ) Photo Store

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THE Royal Canadian Mint is making lighter, high-tech coins -- even some that will glow in the dark and display a dinosaur skeleton.

It may mean your pocketful of coins is more colourful and has a tinnier jingle, but the changes are causing headaches for businesses that rely on coin-accepting equipment for their own bottom line.

The mint is punching out new toonies and loonies using lighter, multi-ply plated steel technology -- the same process used for the lower-denomination coins. The new one- and two-dollar coins are already being introduced into general circulation.

But vending machines and parking meters across the country all have to be tweaked to read the new coins.

"Ever since the toonie came out, coin-acceptance mechanisms have been designed to read the metal content of the coins," said Ralph Burokas, service manager at Gourmet Coffee in Winnipeg, which operates about 200 machines.

"Now, every time they change the metal content of the coin, the mechanism does not read it."

For most machines, that means a software upload for every acceptance mechanism.

That process is already underway to accommodate the new, lighter generation of coins.

"It's a time issue as much as a cost, but absolutely it's a pain in the neck for us," said Gourmet Coffee owner Trevor Westwood.

But at the same time, Westwood and others in the business say it's a cost of doing business.

"We've come to accept it rather than worry or fret about it," he said. "It's something we can't control. It's obviously a government decision so we'll deal with it and move on."

Burokas said it might cost as much as $100 a machine to make the alterations.

Alex Reeves, a spokesman for the mint in Ottawa, said in addition to being more economical to produce, the new coins provide increased security.

"The electromagnetic signal can be better manipulated on that type of coin," he said.

The widely used coin-acceptance mechanism technology, which reads metal composition through a variety of parameters, has created a whole new era of peace in the vending-machine universe. Although statistics are not current, the number of shaken and kicked vending machines has come down dramatically.

But the vending and parking-machine operators may soon want to kick something themselves.

Because as soon as they trick their machines up to accept the newfangled loonies and toonies, they're going to have to get them ready to handle new bank notes, as well.

The Bank of Canada has introduced new $100 and $50 bills printed on smooth, durable polymer film and expects to have the new polymer versions of $20, $10 and $5 denominations out by the end of 2013.

Kim Lockie, past president of the Canadian Automatic Merchandising Association, who runs about 1,200 machines in Fort McMurray, Alta., said it costs him about $15,000 for each round of changes.

"It's not something we want to do, but it's not an option," Lockie said. "The good thing is we work with the mint and they give us enough leeway to be able to get our machines done to accept the coins. They are going to make the change, so we might as well partner with them."

But the whole process might soon prove redundant.

The Royal Canadian Mint is already preparing to launch the next step in the evolution of currency -- a digital alternative to all coinage and small bank notes called the MintChip.

It uses a secure chip to hold electronic value and a secure protocol to transfer electronic value from one chip to another -- from one smartphone to another, for instance.

The idea is the MintChip could be used for micro-transactions -- such as online purchases of songs or news articles -- with no personal data required to complete the transaction.

The mint launched a program earlier this month inviting software developers to create innovative digital-payment applications for the MintChip technology, with winners to receive $50,000 in gold.

There was so much interest in the program the mint has already had to stop accepting registration.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition April 14, 2012 B4