Trends and Cnsideratins in Currency Recycle Devices Nvember 2003 This white paper prvides basic backgrund n currency recycle devices as cmpared t the cmbined features f a currency acceptr device and a currency dispenser device. What is a Currency Recycle Device? A currency recycle mechanism is a device that accepts and stres currency fr dispensing at a later time. Theretically, the same physical piece f currency depsited int the recycle device by ne custmer culd then be dispensed and received by a subsequent custmer. Here s a simple diagram f a currency recycle device: Theretically, if the number f depsits (IN) fr each denminatin is equal t the number f dispenses (OUT), there is never a need t replenish the device, as it will always maintain the same amunt f available currency. Nn-interrupted service can nly be assured if the device never faulted r needed service. Unfrtunately, very few applicatins have a situatin where depsits are equal t dispense peratins. The same basic principle applies t devices that recycle multiple denminatins. Fr example, a device may recycle $1, $5, $10, and $20 ntes. Fr the device t perate indefinitely, each denminatin ($1, $5, $10, & $20) must have an equal number f depsits cmpared t dispenses. A mismatch in the number f depsits versus dispenses fr any given denminatin will create a need t purge r replenish that particular denminatin. The frequency fr purging r replenishing currency is based n the device s strage capacity fr the specific denminatin. Fujitsu Transactin Slutins Inc. endeavrs t ensure that the infrmatin in this dcument is crrect and fairly stated, but des nt accept liability fr any errr r missin.
What are the selectin criteria fr a Currency Recycle Device? Pririty and imprtance f the selectin criteria will vary depending n the particular target applicatin and prject, but here are sme f the basics: Currency and denminatin requirements: Definitin f cuntry-specific currency and denminatin(s) are primary t defining the requirement fr currency acceptance and dispense. It is cmmn fr requirements t include multiple denminatins in a single cuntry-specific currency. Definitin f all currency types and denminatins will determine the requirements fr the currency acceptance prtin f the recycle device. It is als cmmn fr a denminatin t have multiple print years that must als be defined as required, i.e., the recycle device will nly accept media that is defined and supprted by the particular currency recgnitin technlgy. Recycle all denminatins: This feature supprt will allw all denminatin types depsited t be recycled and dispensed. Hwever, this feature is nt currently supprted by all currency recycle devices. Fr example, it is cmmn fr a recycle device t accept five different denminatins and recycle nly three denminatins. Typically, the denminatins nt being recycled will g int a cmmn strage area fr nn-recycled currency and cannt be dispensed. Capacity requirements: Must be defined fr each denminatin type t be supprted by the recycle device. The recycle device must be able t stre a sufficient number f bills fr each denminatin t minimize the frequency f replenishing currency. Fr example, if the strage capacity is small, then t much currency in strage will create a need t remve sme f the currency, and t little currency creates a need t replenish mre frequently. The capacity requirement fr each denminatin type can be calculated by determining hw much currency will be depsited t the recycle device, and hw much currency will be dispensed frm the recycle device. This must be dne fr each denminatin type, and ne f the primary bjectives / requirements fr a recycle device is t prvide extended peratins withut the need t purge r replenish currency. The basic calculatin t determine hw lng the recycle device will perate withut need fr currency purge r replenishment is: Fr denminatin X, Seed Qty + (Depsit Qty Dispense Qty) = Nt Empty r Nt Full - Seed Qty is the initial quantity f currency / starting quantity inventry Sme starting quantity will be required fr each denminatin - Depsit is the prjected quantity f currency depsited (added t Seed Amunt) - Dispense is the prjected quantity f currency dispensed (remved frm Seed Amunt) - Nt Empty indicates there is sme quantity f currency remaining t Dispense - Nt Full indicates there is strage space available t Depsit mre currency Nte: The frmula must be applied t each denminatin recycled by the device. The first denminatin t becme full r empty will require the device t be replenished. The ideal applicatin is the case where the number f depsits equals the number f dispenses fr each denminatin supprted. The starting amunt (Seed Amunt) f currency is then used t reslve any quantity differences in depsit versus dispense. The differences are limited t strage full r strage empty cnditins. Cunterfeit detectin: Varius methds are used t determine currency validity. Cunterfeit detectin ability resides within the recycle device (typically firmware) and must be peridically updated t stay current with changes in new currency designs r series. Additinally, advances in the quality f cunterfeit currency can be thwarted by changes in Nvember 2003 Fujitsu Transactin Slutins Inc. Page 2 f 5
the currency recycle device s ability t detect them. Depending n the prduct applicatin using a currency recycle device, it can be highly desirable t be able t remtely update firmware. The mre cstly alternative is t visit each physical lcatin and device and apply the new versin f cunterfeit detectin firmware. Whether cunterfeit detectin is required is very subjective. Perhaps the best way t determine the answer is t ask the questin relative t yur applicatin. Fr example, is it acceptable if the currency recycle device accepts and then dispenses cunterfeit currency? Perhaps the currency is pre-screened and cunterfeit detectin is nt a cncern. Speed f currency acceptance: Speed is usually determined by the recycle device s prcessing pwer, cunterfeit detectin supprt, available memry, and number f different type currencies accepted. It is cmmn t have restrictins n the number f different currency denminatins (and versins). As a general rule, the currency acceptance features f a recycle currency device are very similar t thse cmmnly fund in gaming and vending applicatins. Bunch versus single currency (item) acceptr: When available, this feature enables the recycle currency device t accept a depsit cntaining mre than ne currency nte at a time. Mst currency acceptr devices accept nly ne nte at a time, e.g., the cmmnly accepted prcess f inserting a single dllar bill in a vending machine. Bulk currency acceptance can save cnsiderable time with applicatins that invlve multiple depsits fr a single transactin / peratin. Cst Analysis (Initial Csts & Recurring Csts) Initial cst cnsideratins: Initial csts are primarily viewed as the purchase price f the device. Currently, currency recycle devices are three t five times mre expensive than the cmbined cst f a currency acceptr device and a currency dispenser device. Hwever, it is reasnable t assume that the high cst f currency recycle devices will be reduced as technlgy advances and cmpetitin grws. Recurring cst cnsideratins: These csts will vary greatly depending n the market and specific applicatin. Hwever, sme f the cmmn recurring csts t cnsider are: Currency purging / replenishment cst: There is a significant cst assciated with purging and r replenishment f currency in the device. An applicatin that has a balance f depsits and dispenses will have a much reduced currency servicing frequency. Hwever, if the applicatin has a significant difference between depsits and dispenses fr any denminatin supprted, the cst savings in using a currency recycle device will be lst. Maintenance csts: Onging maintenance csts include all the activities required t keep the device running prperly. They are generally categrized as first line that can be cmpleted by nn-technical emplyees and secnd line, which require a trained technician. As a general rule, first line maintenance csts are much less expensive than secnd line. Mrever, the mre cmplex the device, the lwer is the likelihd that maintenance can be perfrmed by first line persnnel. Anticipated r Annual Failure Rate (AFR): Prjectins f hw ften a device will fail are cmmnly based n engineering design prjectins r actual field failure data. Mst service / maintenance rganizatins cnsider the anticipated failure rate f each cmpnent in the target prduct t determine the csts fr an annual maintenance cntract, i.e., the mre ften smething is expected t Nvember 2003 Fujitsu Transactin Slutins Inc. Page 3 f 5
break, the mre expensive the maintenance service csts. The currency recycle device is a mre cmplex mechanism and mst ften has a higher anticipated failure rate when cmpared t the cmbined equivalent f a separate currency acceptr device and currency dispenser device. Arguments in Favr f Currency Recycle Devices Physical size: The physical size f a recycle device is typically smaller than the cmbined size f a currency acceptr device and a currency dispenser device. This assumes similar capacities f the recycle devices versus separate / discrete devices. Labr savings: Csts assciated with currency purging and currency replenishment are greatly reduced, but these savings are upheld nly when the number f depsits fr each denminatin supprted is equal r nearly equal the number f dispenses. Machine Up-Time: Assuming the number f depsits fr each denminatin supprted is equal r nearly equal t the number f dispenses, the device culd perate fr an indefinite perid. Again, hwever, this assumes ther factrs such as zer machine failures r need fr peridic scheduled servicing f the recycle device. Reduced amunt f currency: The amunt f currency dedicated t mst applicatins can be reduced. A recycle device will have initial seed inventry plus the quantity f currency that has been depsited (recycled). The seed inventry f a nn-recycle dispenser is determined by the anticipated dispense demand nly. Simplified currency handling: There are fewer cntainer bins / cassettes t handle when using a recycle device. The same strage bins are typically used fr depsit and dispense peratin. Single device: Currency recycle reduces the number f devices being supprted in an applicatin, thereby reducing the number f cmmunicatin prts required t cntrl the device(s). Arguments Against Currency Recycle Devices Higher csts: The initial purchase price fr a currency recycle device is apprximately three t five times mre expensive. In additin, the cst assciated with recurring / maintenance cst is higher ver the life f the prduct. Slwer speed: Currency depsit speed is typically slwer n single-nte currency acceptr devices that must transprt the currency t a strage area in preparatin fr later dispensing. Reduced machine reliability: The actin assciated with transprtatin and strage f currency increases pprtunity fr transprt jam. Technically mre difficult: The currency recycle device is inherently mre cmplex and reduces the amunt f servicing that can be accmplished by first line persnnel. There is ften special training that is required fr secnd line service persnnel. Nvember 2003 Fujitsu Transactin Slutins Inc. Page 4 f 5
Typical False Perceptins Cst Savings: Initial discussins in favr f a currency recycle device can be very exciting. Hwever, nly careful examinatin f the target applicatin will prve r vid the benefits. A review f the items included in the cst analysis sectin f this dcument shuld be included when cnsidering a currency recycle device. Balancing / Recnciliatin: The prcess f balancing and recnciliatin is required regardless f the technlgy being used, (i.e., recycle versus separate currency acceptr and currency dispenser devices). There is ften a perceptin that a currency recycle device will prvide sme advantage when it cmes t end-f-day balancing / settlement. Regardless f whether yu use recycling technlgy r a cmbined slutin using currency acceptr and dispenser, the slutin shuld always be able t determine the amunt f currency dispensed t the custmer and hw much has been accepted. # # # # # Nvember 2003 Fujitsu Transactin Slutins Inc. Page 5 f 5