Final Report Summary - EUROTHENTIC (Development of a Secure, Modular, Cash Checking Machine) Executive Summary:The euro represents the largest currency in circulation in the world and therefore an attractive target for counterfeiters with both the number and sophistication of counterfeits increasing since the euro’s introduction in 2002. To fight counterfeiting, the European Central Bank has implemented strict requirements under the Banknote Recycling Framework which require that no counterfeit notes are re-circulated by cash handling devices. The EUROTHENTIC project aimed to overcome the current technical barriers to wide scale adoption of cash authentication technology by creating a low-cost, retrofitable cash validating module. The module has the capability for high performance note processing and image recording, intelligent image analysis utilizing a neural network approach and securing networking to provide remote system updates and a database facility for the secure tracking of bank note serial numbers and other characteristics such as location and time.In Northern Europe, approx. 15,000 point of sales systems are already equipped with both coin and note recycler systems and market in Europe is at a tipping point where self-service and self-checked-out systems are gradually gaining in acceptance as a mainstream retail technology. These systems, integrated with the EUROTHENTIC Cash Checking Machine system, will enable efficient and secure recycling of money. The advantages for the stores are the secure and lower cost for cash handling due to amount of cash in store is reduced and also back-office work and CIT will be minimized. This enables the cash back function – consumers withdraw cash directly at checkouts. While automated systems for validating bank notes have been available, they have not yet found wide acceptance in the retail sector due to high capital costs and in particular performance considered slow by the sectors standards.Project Context and Objectives:The Eurothentic project has been developing a Euro-note validation equipment. Euro is one of the most secure currencies in the world and each note has multiple security and identification features. Not all of these features are possible to recognize with single technology and therefore also Eurothentic project incorporates multiple technologies. The project has been developing innovative image processing system, control electronics for the note-recycler and effective and scalable back-end software system for a retail business.The project had set a number of objectives, both scientific and technical. The priority of the objects was the impact on the end result so that the consortium SME members have a technology which they can develop into a product on the money handling market. The criteria require that, “cash handlers shall re-issue euro banknotes to customers only if these banknotes are duly checked for authenticity...” and in particular “Banknotes shall only be returned to circulation via ATMs or other customer-operated devices if they have been checked for both authenticity and fitness by banknote handling machines successfully tested by an NCB” (National Central Bank). This means that that all automated cash handlers which re-issue banknotes to be able to differentiate between:- Authentic banknotes of sufficient quality for circulation.- Authentic banknotes which are unfit for circulation.- Counterfeit banknotes which are unfit for circulation.- Banknotes which could not be authenticated (typically due to soiling or damage).Euro distributing National Central Banks each provide testing facilities for organisations to ensure their products meet the ECB’s criteria for automated processing equipment. The test is open to any organisation producing equipment for authentication of euro banknotes. Each device is tested for its ability. These tests are performed for the product, not for prototype, but Eurothentic consortium was able to trial the validation at the Italian Central Bank to verify that the device is capable to meet all the requirements.The project had set following scientific objectives:- To identify and document all current and most possible upcoming security functions of the Euro banknotes. To exploit to maximum various detection technologies and categorize/map these to best fit the different security functions previously defined. Studies of such technologies will provide the background for finding connections between existing technologies and the special requirements arising from the new regulations required by ECB. - Better scientific understanding of various algorithms that can be used for pre-processing, pattern recognition, analysis, Optical Character Recognition (OCR) and classification of banknotes.- To gather all input from technologies and overall requirements in a decision matrix helping the project on how to best, when it comes to, performance, size and cost, decide upon best suitable system design/architecture that will be flexible, sustainable and meet future requirements from ECB.- To utilise and expand our current expertise in real time mechatronics systems related to software, data- communication, imaging analysis and sensor technologies together with the output from the decision matrix to develop a detailed design specification for our proposed note validation module.- Further to increase the knowledge about how to best modularise the system to increase the possibilities to meet future requirements – to provide updates without redesign of system.All the scientific objectives were met during the project and all project beneficiaries have reached a high level of understanding about money handling, money validation and technical aspects needed to prepare such device and to productise it to be accepted and adopted by the markets all around Europe.Project Results:The Eurothentic device is integrated with Cashguard note cassette and the production version is planned to be integrated and sold as a part of Cashguard product portfolio. This way the Eurothentic product will have an excellent step-stone to European money validation and handling business. Eurothentic was designed so that it will be integrated part of Cashguard note-cassette system what again can be connected to a large number of different back office and POS systems. The investment for a retail shop is not very different from a regular Point of Sale system and cash register, but the security and losses from non-valid money and possible counterfeits and counting errors when making purchases is reduced significantly. It is also necessary to understand that depending of the security level wanted, Eurothentic system combined with secure Cashguard system makes cash register much more secure than normal cash registers because even the cashier doesn't have full access to the money.Potential Impact:The project achieved all the major objectives - to create money validation prototype. Some of the minor objectives were only partially achieved because of various reasons. Mainly the ECB certification because ECB gives certification only to the final products, not to the prototypes. This also caused that the project couldn't make full scale testing in supermarkets or any retail shops. The project partners are planning a continuation for the project and to make Eurothentic as a real product which they are selling across the Europe and for that the planning of full scale validation is started. The consortium was very satisfied with the results.The main competitors for such device as Eurothentic is simple and cheap money verification and counterfeit recognition devices, these however can't validate the money. There are money validation devices available which are aimed for central banks. These validation devices are highly expensive and only few of those are needed in central banks who take care of the money circulation in European countries. Eurothentic is not a competitor for such devices, but instead is aimed for the high volume markets and will be a spear-head solution for the retail business to enter to the banking sector, thus getting new revenue streams through money handling business and cost savings because the money is validated on site, instead of sending cash bags and boxes to a money handling centers (such as security companies). On retail sector currently the devices used on the cash point are checking the money if it is counterfeit or not, the validation for further circulation is not done at the cash point. The validation will meet requirements set by the European Central Bank (ECB) and will reduce cash handling costs due to reduced amount of cash in stores. The EUROTHENTIC system will provide collecting, dispensing and recycling of banknotes. Cash handlers in cash centers today use equipment that is expensive and high performance and can therefore not be used in a retail environment. Banknote Authentication in the Retail Sector The total cost of cash handling in the EU is estimated to be between €50 and €75 billion per annum. Retailers, banks and all other organizations handling cash bear their own cost burden. In the retail sector, these costs range from staff and equipment costs at the point of sale through back office processing, cash in transit (CIT) and banking costs and can represent a considerable amount. In the retail sector, significant cost savings can be achieved through the efficient and effective recycling of cash and there are strong trends showing the increasing adoption of cash recycling technologies and automated systems.Socioeconomically the Eurothentic module will also contribute indirectly to crime prevention due to less cash at each POS station and a closed note containing system. Following completion of the project and the successful achievement of project goals and objectives, the consortium anticipates gaining a 10% share of the European market for cash validation modules for retail systems amounting to €48 million with a final product 3 to 5 years post project. As the system is based on smart and self adjusting image processing it can be adapted easily to the other currencies than EURO so the consortium believes that within 5 years of launch of Eurothentic device a 1% of the rest of the world money validation market could be penetrated equaling to €11 million. A successful project and product will support the security of European currency and the safety of Europe’s citizens, while facilitating the implementation of the ECB Banknote Recycling Framework. Early market penetration will be achieved through our end user CashGuard, which already had 14,000 installed systems operating in 2009.The Eurothentic project as setout only had one customer, Cashguard AB in mind. The end product of the project is closely integrated to the existing Cashguard solutions as an integral part of the note-recycler. The consortium has chosen to keep low profile on the dissemination activities as the solution would not be available to anyone within the protection period agreed with Cashguard. List of Websites:www.eurothentic.comProject Coordinator: Mr. Jan Petter Holst Johnsen PRESIGHT SOLUTIONS ASMidtbergveien 2, Sandnes 4313Norwaye-mail: petter.johnsen@presight.comExploitation manager: Mr. Mark WorlidgeV-viz LimitedUnit 1, Bunkers Hill, Welsh Road, OffchurchLeamington Spa CV33 9BEUnited Kingdome-mail: mark.worlidge@v-viz.com Related documents final1-eurothentic-case-study.pdf
