Such stats suggest that the impact of the overhaul on UK businesses is being somewhat overlooked. Subsequently many retailers, despite the relatively short timescale until plastic notes come into circulation, are not fully aware of the extent of the adaptation required for the conversion – and the subsequent costs.

“The announcement that the £20 note will also be printed on polymer will only add to the huge operational challenges facing UK retail companies. Indeed, we estimate that the migration to polymer could cost a total of almost £240 million - with the retail industry bearing the brunt of this,” says Brendan Doyle, CEO of CMSpi. “It is frustrating that the bank has declined to conduct a cost-benefit analysis, particularly as cash transaction volumes are in decline. And while the bank has promoted the security of polymer, the value of counterfeit notes is falling and is a mere fraction of the value of card fraud – counterfeit cash accounted for about £13 million in 2011, compared to the rising £455 million of annual card fraud, for example."

Costs will come from, in particular:

Outlets that operate ATMs will face significant disruption – particularly during the period of co-circulation when both paper and polymer notes are in use. Indeed, once ATMs have been upgraded (a manual process which itself will cause disruption), they will only be capable of holding and dispensing polymer notes. This means that any paper notes received by retailers will likely have to be banked rather than re-distributed to consumers. Banking charges for such retailers will therefore rise.

Concurrently, until polymer notes themselves become fully embedded into circulation, retailers may not initially receive the volumes of notes required to fill their newly upgraded ATMs (or indeed, to provide change to customers) from consumer transactions alone. To compensate, additional polymer notes can be ordered and delivered which, of course, incurs a charge.

As the retail industry orders more cash services in order to fill ATMs with polymer notes, the increase in demand could result in levels of cash collection service falling, with some collections delayed or even missed. And, as a means of overcoming this spike in demand, cash collection services may introduce “prioritisation tactics”, in which prices for peak collection/delivery times are increased.