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HSBC Holdings PLC has launched a test designed to encourage more ATM operators to stock 5-pound notes in their cash machines, a spokesperson for the Bank of England, the backer of the effort, tells CardLine Global. The test, scheduled to run until October, involves about 100 ATMs equipped to dispense the notes along with 10-pound and 20-pound bills, the spokesperson says. The ATMs primarily are located in the Midlands and southwestern parts of England, the spokesperson says. "The study is to determine the costs and feasibility of dispensing [5-pound notes] from ATMs with a view to persuading all ATM owners, not all [of which] are owned by banks, to issue" the notes, the spokesperson says. "The exercise is in response to a longstanding problem of a shortage of [5-pound] banknotes in circulation. Those that are [in circulation] are often not in great condition." About 60% of banknotes enter circulation through ATMs, according to the Bank of England, and cash still accounts for the most transactions in the UK. Most UK ATMs, the majority of which are owned by banks, are set to dispense 10-pound and 20-pound notes, the spokesperson says. Five-pound notes are "regarded as 'small change' by retailers," the spokesperson adds. The relative scarcity of the 5-pound notes results in longer circulation times for the notes and "soiled and scruffy" bills, according to a 2007 speech from Mervyn King, governor of the Bank of England. Barclays PLC and Sainsbury's Bank also have stocked some ATMs with the 5-pound notes, the spokesperson says. Immediate comment from HSBC and the other banks was not available Monday. Bank Machine Ltd., an ATM operator based in the United Kingdom, also has stocked some of its ATMs with the notes (CardLine Global, 2 April).
