New plastic Mexican currency offers greater durability

Houston Cronicle

By Jenalia Moreno

Mexico City, 09.10.02

Enrique Nuo took the shiny new 20-peso bill from a customer and grew excited because it was the first plastic bank note he had seen. He pulled a fistful of worn, old pesos from his cash register and compared them with the new ones.

"When they're very old, they look it," said Nuo, comparing some tattered bills, each a different hue of blue after being touched by countless people, with the light blue polymer currency. "You know you're counting pure microbes. You know you're counting sickness."

Picking up the new banknote, Nuo, 44, noticed it contained a transparent plastic window, where the number 20 was engraved to prevent counterfeiting.

Nuo, the owner of the Mini Price Imports store, quickly noticed two of the main reasons for replacing the old $20 peso bills with plastic ones: They will have a longer shelf life and they'll be harder to counterfeit.

In the case of the 20-peso note, which is worth about $2, the old paper version has an average life span of nine months because, Banco de Mexico officials said, many people here do not use wallets and they staple their bills to paper, tearing them.

That's a key concern in Mexico because merchants often reject money that is slightly torn, no matter how small the denomination.

The fact that he and others were seeing the bills for the first time, a week after they were officially released, is in keeping with another fact of life in Mexico -- currency is often hard to find at banks.

In this case, banks and currency exchanges didn't start distributing the plastic currency for a week. The government started its experiment with plastic money by replacing its smallest denomination of paper money. If it works, successive, larger denominations will be available in polymer.

This changeover seemed to be working smoothly, largely due to a nearly yearlong publicity campaign.

Most merchants in Mexico City accepted the money on Monday night without giving it a second glance. But some were more enthusiastic. Cashiers at Wal-Mart, a health food store and a steakhouse accepted the plastic money and then began excitedly showing it to their co-workers.

A roadside flower vendor, Javier Gonsalez, said he didn't know if he liked the new bills because they seemed slippery enough to fall out of his pocket.

"If it's money, it's the same for me," said Gonsalez, 29.

Polymer bills should last three times as long, and it's also more hygienic according to the bank which noted these new bills can be washed.

Counterfeiting has become a problem, so the new bills have several security features embedded in the polymer, including the transparent window.

Mexico turned to Australia for advice on how to shift to plastic currency. They made the switch 14 years ago in the land Down Under. Today, Australia and New Zealand make polymer cash for countries such as Brazil, Thailand and Romania.

Australia made this first batch of pesos for Mexico. From now on, the Latin American nation will produce its own bank notes under a licensing agreement with Australia.

Now, Nuo said, if the Mexican government could only figure out how to put more money into circulation. He often stands more than an hour in line at a bank only to find it has run out of change. That means he has no change for his customers.

"It's bad administration. It's bad service," said Nuo.

Small establishments often run out of change, which is suicide in this cash-based society. Many small and medium-sized businesses don't accept credit cards, and if a customer tries to buy a few items using a bill worth about $20, cashiers often refuse the sale.

Bank of Mexico officials said they are hoping the longer-lasting money will help them increase the numbers of small denomination bills in circulation.