Treasury consultation casts a shadow over UK coin-op

Treasury consultation casts a shadow over UK coin-op

Thursday, March 15, 2018 Posted by Luke Massey
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The future of 1p and 2p coins has been thrown into doubt

The long term future of coin-op gaming in the UK has been thrown into some doubt following news of a Treasury consultation on the current mix of low-denomination coins, specifically 1p and 2p coins.

Ministers deny any concrete plans to scrap the copper coins, but the view is they are simply too expensive to mint and many end up languishing in jars or even in the bin.

The news will have raised concern among many of the UK’s seaside arcade operators who rely on a steady stream of 2p coins to feed their popular coin-pusher games. The 2p coin works particularly well in this game format due to its size and weight and is a mainstay of the arcade sector. The 10p variant of the coin pusher is also popular but considered less effective than its 2p cousin.

In its consultation, the Treasury said: “...due to an increase in the rate of decline in the use of cash for lower value transactions, there is a reduction in demand for coin from cash processors; they are now holding increasingly large stocks of coin that have returned to them but for which there is declining future demand.

“This situation has been compounded in the short term by the public returning not only their round £1 coins but also other denominations during the recent recoinage of the £1 coin. With falling long term demand over time, structural surpluses of some denominations of coin may be generated. This will affect the long-term demand for new coin from the Royal Mint.”

It added: “The cost of industry processing and distributing low denomination coins is the same as for high denomination coins, making the cost high relative to face value and utility. Given the fixed costs of the cash distribution infrastructure these costs are likely to rise as cash usage declines which may have impacts on the supply of coins.

“Some businesses are also self-regulating denominations, by using rounded pricing to avoid the need for certain low denomination coins and setting vending and other equipment not to take some denominations of coin.”

According to HM Treasury, as a society we are less reliant on coins than ever before. Six out of 10 1p and 2p coins are used just once before being saved in a jar or summarily binned. It would be interesting to see if a similar fate befalls 5p and 10p coins which, it could be argued, are also fast becoming more disposable forms of currency.

The UK would not be alone if it took the decision to remove its low denomination coins. Australia, Brazil, Canada and Sweden, among many others, have ditched theirs.

Totally Gaming says: The Treasury may well be making overtures about retaining coinage, but the fact that this consultation exists at all suggests otherwise for the longer term. Many would argue that the world can’t function without some form of cold, hard cash. No doubt at some time in history it was considered inconceivable that clocks would function without hands. That’s progress for you!

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