Mould-made cotton
bank note paper and plastic substrate alternatives
A paper given by John Haslop, Divisional Technical Manager
De La Rue Security Paper and Print Division
08.07.97
Banknotes have been produced on cotton based paper for around 300 years. In the last 30 years, a number of alternatives to cotton based paper have been explored based on synthetic materials. Why then, are nearly all of the world's banknotes still produced on mould made cotton paper? What are the factors which still make cotton based paper the best choice for banknotes today? How do alternative materials compare?
This paper considers the important factors that determine what substrate is appropriate to use for banknotes. These factors are:
(1) The security of the base on which the banknotes are printed
(2) How the substrate behaves with print
(3) How the substrate behaves through automatic machine handling
(4) What the public perception of the material is
(5) How the source of the base material is controlled
(6) How the base material affects the environment
(7) Whether the base material is proven
(8) The future
In the following sections each of these issues is looked at in turn. The properties of paper, and of plastic are discussed in relation to these factors.
Finally, a summary is provided in which cotton based paper is treated as a new product against a standard of plastic. This approach highlights many properties we take for granted.
Banknotes circulate in a world where the threat of the counterfeiter is ever present. Not only is the threat of the counterfeiter ever present, but the methods used are ever changing. With the development of new printing processes, and the introduction of new technology, more methods of reproduction are available to the counterfeiter than ever before.
Counterfeiting methods are not only more numerous, they are also more widely available and good results are easier to achieve with less skill and lower cost than previously.
It is therefore essential that providing a secure banknote is properly weighed against the costs of banknote production. A well designed secure banknote will consist of three fully integrated elements, substrate, print and surface applied features. A key barrier against banknote counterfeiting, is to provide features which are immediately recognisable by the general public. This paper concentrates on the part played by the substrate and its interlinks to the other two areas.
Cotton based mould made banknote paper has three key features which are present in nearly all banknotes produced in the world, and which most every member of the general public would recognise. These are:
(1) Unique Feel to the paper
(2) Cylinder Mould Made watermark
(3) Security Thread
(4) Plastic Security
2.1 Unique Feel
Commercial paper used for counterfeit production is made from different types of wood pulp. Cotton based banknote paper has a unique feel, which is unlike the feel of wood pulp based paper. This unique feel is invariably the "trigger" which leads people to look at a note more carefully and discover whether it is genuine or counterfeit. The ability of the unique cotton feel to combine with the unique feel of intaglio print leads to an enhanced tactile detection by the public. This unique feel is recognised by the general public - whether it is the "crackle" of a crisp new note or the feel of a well used banknote.
2.2 Cylinder Mould Made Watermark
The cylinder mould made watermark is an extremely effective feature which is easy for the general public to recognise and confirm whether a note is genuine or counterfeit. It has a wide tonal range going from light, through a number of shades to dark. Those areas which appear dark when lit from above, appear light when lit from behind, giving it an optically variable property. This property cannot be reproduced on a colour copier, and is difficult to simulate by printing methods. More recently the inclusion of "highlight" areas has increased this tonal range.
The superior security of the cylinder mould made watermark has been endorsed by Interpol, which recommends its use in banknotes.
2.3 Security Thread
Cotton based banknotes can also incorporate a security thread. Many banknotes now incorporate "Stardust" windowed thread where the thread surfaces from the paper at intervals to reveal "windows" of highly reflective material. This reflective material appears as a series of black marks if the note is reproduced on a colour copier making the counterfeit obvious.
The metal security thread has developed into a major vehicle for the integration of security. A broad range of threads incorporating a range of visual properties are now available to increase the confidence of the public in using threads for authorisation. In addition machine identifiable features can be incorporated for automatic verification. This aspect will be enlarged in Section 4.
2.4 Plastic Security
Plastic banknote substrates do not have a distinctive feel from other commercially supplied film materials. The only feel imparted to a plastic note comes from the intaglio printing alone rather than the combination of substrate and print. The plastic substrate does not have an integral equivalent of the watermark built into its base structure. A transparent window is used in plastic banknotes as a security feature. This window is achieved by not coating the base transparent plastic in the window areas. Thus it is very straightforward for a counterfeiter can print similar windows onto a transparent base.
Plastic substrates do not have the ability to contain a security thread. Although research and patent claims have been made concerning the lamination of twin plies allowing for inclusion of security features, these have not been seen in live notes. This is principally due to cost and production constraints to be covered later. It would be equally easy for a counterfeiter to adopt a similar technique for including a thread.
In summary the apparent security derived from plastic via its "window" is a surface effect and not a substrate effect. In contrast cotton based paper can contain integral security features of watermark and thread as well as contribute to an overall different feel.
The need for a banknote substrate to integrally link with print and surface applied features has already been stated. The cotton based paper used over 300 years has seen a number of developments take place in the printing processes as banknotes have changed through the centuries. The transition from wooden letterpress blocks through intaglio to the incorporation of modern lithography has all been accomplished smoothly. More recently it has accommodated the inclusion of surface applied foil features and stripes.
The fibrous nature of the cotton paper allows the inks to penetrate and key to the substrate. This keying plays an important part in the durability of the printed image. By integrating in this manner both the substrate and the other security features degrade at the same rate. Hence a worn dirty banknote is clearly recognised as a document having reached the end of its working life.
In contrast a plastic surface has to be treated in some manner to enable printing to take place. The base white coatings applied to the transparent plastic are needed to provide a suitable surface for the inks to key on to. The keying in this instance principally relying on a chemical bonding approach. Additionally to achieve satisfactory ink permanence it is necessary to add an extra process of over-varnishing when the note has been printed. Without the final varnish coatings the banknote durability is not satisfactory. The application of surface applied security features, which are increasingly common, does not give the same permanence on plastic. To date these features have only been applied to commemorative plastic banknotes which do not undergo the rigorous circulation of normal notes.
The reliance on surface adhesion is revealed when a plastic note gets worn. Creases remain more permanent in plastic and surface abrasion removes ink from the tops of the folded crease. The banknote therefore gets worn in a non uniform or integrated manner. The lower relative bonding of the print to the plastic is the cause of the fact that plastic notes have to be removed due to ink loss rather than complete document wear. The danger is that genuine banknote substrate can continue circulating without an effective printed image. Is this still a legal banknote and how do you verify it?
Increasingly banknotes are being handled by machines in addition to the public. This machine handling does not just take place in the controlled environment of the Central Bank or Commercial banks, it is also moving into the areas of public vending and ticketing. In addition there is a large middle area of shops, garages and other retail organisations where cash cycling is expensive and machinery is being introduced to overcome these costs. Currently all note processing equipment, be it large or small, has been designed to handle cotton based banknote paper. The change to plastic introduces the problems of static, low friction in a pile, and permanent creasing. These problems have required the entire note handling style of a country to be changed. Folding of banknotes is severely discouraged and bank tellers as well as shopkeepers have all had to be retrained. Additional equipment modifications have also been required to overcome the issues of static and friction.
The previously mentioned inability of plastic substrate to contain a security thread is lowering the level of machine handling security. It is generally recognised that a range of machine identifiable security features are needed in all banknotes. These features will vary in cost of detection and security level. Thus machine authentication used in vending machines and similar applications use only a couple of simple features to authenticate a document. The machine readable security thread provides a simple positive signal confirming the authenticity of the substrate. By relying totally on printed or surface applied features for security, counterfeiting by chemical transfer of the surface print and creating two notes from one is possible. This is a real threat since modern criminal gangs have perfected transfer techniques to the point that they can visually fool experts, let alone simple machine detectors.
The banknote symbolises the common perception of wealth. It is known to all people in a country from early years until death. It is classless device that requires no special entry conditions. The public often see it as representing their country, rulers and international standing. A paper banknote has fulfilled these demands for hundreds of years and becomes ingrained in the public life.
The handling characteristics of the paper banknotes form part of these individual criteria. The note can easily be folded and has sufficient surface friction to remain inside wallets and purses when they are opened without easily falling out.
Plastic has to be introduced to the public as a change of way of life. Reasons need to be implanted on the public rather than natural acceptability. Additionally the public need to be told to change their methods of handling banknotes and avoid creasing them. They need to be warned of the increase slippery nature of banknotes. These differences can cause the public and media to question the reason for change and put pressure on the Central Bank. Confidence is not questioned with paper, the confidence of banknotes is questioned when they are changed to plastic.
Cotton based paper fulfils the apparently conflicting need of being both a secure source of supply, and also being multi-sourced.
Cotton based mould made paper is produced by Security State Paper Mills or by specialist security papermakers who supply only to banknote printers. The use of mould made cotton based paper for banknotes has the advantage of the realistic competitive market pricing and security of supply which results from multiple sources. At the same time the physical security of supply which comes about from dealing with specialist security papermakers is maintained.
Cotton based mould made paper is not converted from another more widely available manufactured material, it is the result of a specific manufacturing process which can only be done by specialist security papermakers. Cylinder mould made paper machines are specialist equipment costing tens of millions of dollars, and are not used in any other industry. Manufacturing is done under strict physical security and security accounting. A counterfeiter can never legally obtain a sheet of genuine cylinder mould made cotton banknote paper. In contrast plastic polymer used for banknotes started life as a commercially available plastic film. Tens of thousands of tons each year are produced of the same plastic sheet in many different thickness and used for many commercial products. Since the base plastic substrate has no in built security, it is possible to legally obtain similar material to use for the start of a counterfeiting operation. Counterfeiters can print a coating on the surface as easily as genuine plastic banknote printers.
All users of raw materials must these days play a responsible part in protecting the environment. Choosing a material with the right environmental impact is therefore extremely important.
Cotton based mould made paper is produced from a natural material (cotton). Cotton comes from a renewable source, since it is a crop which is harvested, and then re-sown annually. In using cotton as raw material, the natural resources of the world are not being depleted. Cotton based mould made paper also incorporates re-cycled waste from the textile industry, eliminating the need for this waste to be disposed of. Being a natural product, cotton will also naturally degrade and eventually support new plant growth.
Plastic substrates are made from oil, which is a finite resource which is being rapidly depleted by the world for its use as a fuel and in other plastic applications. Everyone is also aware that plastic does not naturally degrade, hence the sight of much plastic waste spoiling the countryside.
It is worth reminding oneself of the track record of cotton based paper and then comparing this with the available knowledge of plastic papers. Firstly one should consider the nature of the climate and public environment that banknotes circulate within. Cotton based banknote paper has survived centuries of use in all continents of the world and under all related climatic extremes. There has not been a single country that has found difficulty with survivability of cotton banknotes. Despite the fact that alternative materials and synthetic sheets have been available for over 50 years there has been no major need for change.
When considering change two major areas are put forward in support of plastic banknotes. These are improved durability and economy. As previously indicated the security of plastic is not a competitive factor as the base plastic has no integral security feature.
8.1 Durability
When considering cotton based paper banknotes it is important to remember that there is a range of durability properties and not just a single characteristic. Because the fibres can be treated in a number of ways and formed on the paper machine with a variety of formulations it is possible to tune the paper to suit an individual country's needs. Using the well known parameters of substance (gsm) and mean double-fold (mdf) as indicators, papers can be made ranging from 83 gsm, 2,500 mdf to 95 gsm and over 10,000 mdf. Even further extremes are possible such as light paper used by France or even stronger base papers used in some Middle Eastern countries. Thus cotton based paper banknotes can be tailor made to suit a particular country's environment. The choice of paper specification is also related to the cost/benefit of a higher priced high specification paper against a lower priced lower specification paper. There are many examples of improvement in durability that have been made as a result of an upgrade to the paper specification. These changes are often made to improve durability following a reduction in note life due to increased velocity of circulation.
The durability as related to average note life varies between different regions in the world. Often this is related to the grade of banknote paper used and more importantly the denominations. A recent survey of data of low denomination notes from a range of sources revealed the following:
| Average note life (in months) | |
| Bank of England | 7.8 |
| Middle East | 13.5 |
| Africa | 7.8 |
| South America | 17.4 |
| Far East | 12.9 |
This table shows that if all these countries replaced their paper with the same plastic substrate, the benefit achieved would vary by a factor of 2.3 assuming all other aspects were equal. This variation can have a significant effect on any economic calculation.
In contrast to the wide range of paper specifications available the current approach to plastic uses a single base material as previously described. The material is coated to aid ink adhesion to obtain increased life.
Field evidence confirms that the coating is the area of greatest weakness combined with the inherent crease retention fundamental to the plastic substrate. Plastic banknotes do wear by loss of ink causing a break-up of the visible security image which is their total means of differentiation between the banknote and commercial plastic.
Quoted evidence of extended lives of banknotes of between 3 and 5 times is taken from a comparison of only one country, Australia. The comparison is made against a previously very low life banknote using cotton paper with a minimal specification. The life quoted for this paper was around seven months. However if Australia had adopted a paper grade similar to the South American example shown, it is reasonable to assume a change to plastic would at best achieve a doubling of note life, with a commensurate loss of security.
The life of a plastic note will not be constant in all countries of the world. Different cultures lead to difficult handling patterns. Evidence is beginning to emerge that in tougher climates and conditions, plastic actually only increases note life by 50% over existing well constructed cotton based paper banknotes.
8.2 Economy
Mould made cotton banknote paper is a multi-sourced product where equivalent grades can be obtained from over ten paper mills who compete on an international basis. In addition there are a number of countries who take advantage of having the benefit of a state owned banknote paper mill to reduce costs.
Competition brings with it the benefit of a world market price which is set at a level that is continuously kept as low as practical. Each supplier is striving to out-perform their competitors and technological and operational improvements are continuously fed through to the customer as a benefit in cost performance.
The plastic scenario is very different. The method of production of plastic sheet is economically carried out on equipment which produces around 10,000 tonnes per annum per line. Thus a volume of say 50 million banknotes, which is roughly equivalent to 50 tonnes of plastic, is a very small part of the annual production. For this reason the major producers only see plastic banknotes as a potential source of revenue if large countries such as USA, India or Russia convert. Meanwhile, production of small quantities of banknote plastic can only be economically carried out with relatively high prices. The Australians have been exposed to this effect and have already had to move to a third supplier in order to maintain supplies. The larger and economic manufacturers having withdrawn from this particular market.
Thus current plastic banknotes are sourced from one small manufacturer, aiming to fill a special small line with high priced special substrate. No competition exists and there is no reason to consider lowering prices, in fact the reverse would be considered once a country is committed.
Having identified that the base plastic is costly and from a single supplier it is then essential to remember the need for an overcoat. The requirement to carry out an extra coating operation to achieve acceptable durability has to be added to the cost of the base plastic and first surface coating.
When making price comparisons with plastic it should be remembered that an equivalent paper price should be an unwatermarked, unthreaded cotton paper. Comparisons of a high security paper for banknotes against a non secure plastic is not a common basis. Using this approach it will be found that the cost advantage of plastic is very poor for potentially only a 50% increase in note life.
Even further economic benefit can be achieved by a country for a lower security instrument of value by converting to coins. The life of a coin is 30 years and the cost comparison with plastic is very good.
This paper addresses the various areas of comparison between cotton based paper and plastics as they are today. However it has already been stated that the paper based banknote has changed significantly throughout its 300 year use. Also there are changes occurring in the plastic area. Since a change to plastic is so significant to the public it is beneficial to take a longer term view to ensure the decision for changes is the right one.
The paper manufacturers have not stood still and currently there are developments entering the market which integrate the known security benefit of paper with the advantages of polymer. By bringing the polymer technology to the paper base one can build on success and improve print quality, ink adhesion and soiling resistance. This is achieved without the need for additional coating processes in the print plant. Such products will become common by the start of the next century. They will build on the competitive nature of the existing market.
Concerning plastic it is known that other manufacturers are planning to enter the market. However their products are not compatible with the existing plastic and will look and perform differently. Thus, a change in supplier will mean a change in look and performance, something which is not desirable. Therefore there will not be a competitive plastic market, however there will be a series of small specialist producers aiming to market their own specific product. This does not auger well for international recognition of plastic banknotes.
As indicated in the introduction, this summary treats the cotton based paper banknote as a new product. It assumes that the current plastic banknote was the world standard. The comparative arguments in this paper would prove overwhelming if the change in substrate was from plastic to the new product of a cotton paper based banknote. It is in this context that the following points should be considered.
(1) Paper brings integral substrate security
(2) Paper does not need to be treated to get good print quality
(3) Paper does not need to be overcoated
(4) Paper is designed for machine handling
(5) Paper is the public's choice
(6) Genuine banknote paper cannot legally be obtained by criminals
(7) Paper is environmentally friendly
(8) Paper has a better durability/cost ratio than plastic
(9) Paper specification can be tailored to an individual countries needs
(10) Paper supply is competitive
(11) Paper has a past a present and a future
