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The authentication times issue 35

Welcome to the 35th edition of The Authentication Times.
This issue of THE AUTHENTICATION TIMES is dedicated to importance of design in authentication industry.
Designing a consumer product, with a specific set of functions (authentication) to perform is very challenging, especially when it comes to banknotes, product authentication and brand protection, the consumer experience is everything.
In an era of consumer empowerment, the importance of design have increase manifold. The brand protection community (brand owners, packaging convertors, security feature developers and security printers, distributors and supply chain security professionals) must step out of their comfort zones and interface with the user, consult the user, open a dialogue with the user and listen.
While designing any banknote, selection of security features also play an important role. The issue also addressed the usage of Holograms, optically variable devices (OVDs), diffractive optically variable devices (DOVDs), diffractive foil features (DFF) or diffractive optically variable image devices (DOVIDs) as important security features on banknotes.
We hope you will found this issue informative and interesting and as always, we look forward to receiving your feedback.

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The authentication times issue 35

  1. 1. The Official magazine of Authentication Solution Provider's Association (ASPA) Nov 2018 | Volume 13 | Issue 35 CELEBRATING YEARS OF AUTHENTICATION 1998-2018 The Importance of Design in the Authentication Process - Understanding the User Experience Predicting future banknote designs By a use-centered approach The Evolution of DOVIDs on Banknotes
  2. 2. WELCOME Dear Readers, Welcome to the 35th edition of The Authentication Times. This issue of THE AUTHENTICATION TIMES is dedicated to importance of design in authentication industry. Designing a consumer product, with a specific set of functions (authentication) to perform is very challenging, especially when it comes to banknotes, product authentication and brand protection, the consumer experience is everything. In an era of consumer empowerment, the importance of design have increase manifold. The brand protection community (brand owners, packaging convertors, security feature developers and security printers, distributors and supply chain security professionals) must step out of their comfort zones and interface with the user, consult the user, open a dialogue with the user and listen. While designing any banknote, selection of security features also play an important role. The issue also addressed the usage of Holograms, optically variable devices (OVDs), diffractive optically variable devices (DOVDs), diffractive foil features (DFF) or diffractive optically variable image devices (DOVIDs) as important security features on banknotes. We hope you will found this issue informative and interesting and as always, we look forward to receiving your feedback. © 2018 ASPA – All rights reserved. ASPA, The Authentication Times logo, the ASPA logo, and product and/or service names are trademarks and service marks of ASPA and are registered. The Authentication Times is the official magazine published by Authentication Solution Providers' Association (ASPA). The publication offers in-depth analysis, news, research, article and expert opinion on latest developments on Anti-Counterfeiting, Brand Protection, Serialization and Traceability in and out of India. The views expressed by contributors and correspondents are their own. Reproduction of the content of the AUTHENTICATION TIMES in whole or in part is allowed, provided the source is acknowledge. Editorial opinions expressed in this magazine are not necessarily those of ASPA or the publisher. Neither the publisher nor ASPA accepts responsibilityforadvertisingcontent. INDEX Publisher Corporate Communication Authentication Solution Providers’ Association (ASPA) 21-Ground Floor, Devika Tower 6 Nehru Place, New Delhi 110019, India Telefax: +91 (11) 41617369 Email: Website: Issue Editor Chander S Jeena Image Consultant PR Mantra Printed by Gopsons Papers Ltd. A - 2&3, Sector 64, Phase 3, Noida, India For further information, subscriptions, contributions and advertisement, please email Issue 35 Chander S Jeena Editor, The Authentication Times Event Calendar Label Expo India November 22-25, 2018 Greater Noida (Delhi NCR), India Pharmaceutical Traceability Forum November 28-30, 2018 Philadelphia, USA High Security Printing Asia December 03-05, 2018 Hanoi, Vietnam 20th Anti-Counterfeiting & Brand Protection Summit January 28-30, 2019 San Francisco (CA), USA In this issue The Importance of Design in the Authentication Process - Understanding the User Experience Interview with Julian Payne Predicting future banknote designs The Evolution of DOVIDs on Banknotes Decoding three factors behind the growth of anti- counterfeit market in India Trends and Drivers in Tax Stamp Design and Security Patent Applications Published in Indian Patent Office Journal News Bytes 1 3 7 11 19 21 26 27 About Cover page: The cover page image is De La Rue's latest polymer housenote integrates design with security technology harmoniously.
  3. 3. 1 n order to better understand the Iauthentication user - experience we must leave our traditional 'comfort- zones' and reach out to professionals in a field that we are only beginning to exploit in a positive fashion for the users and consumers of our products. We must go to a place where designers rarely go. A place where we can learn about what the public really see if and when they really look at your security labels, tags etc.. Not only can we learn about what they see, but more importantly, about how certain elements and designs characteristics triggers specific responses and reactions. But by travelling to this place we may be in store for some surprises. We must travel there with an open mind and leave aside our pre-conceived understanding of how the consumer user really engages with a product and its packaging/labelling during the decision- making process to purchase. Many things we believed may be proven to be false and if this is supported by fact and science, we must be humble and professional enough to look at how we design packaging and labelling for public authentication differently. After all, we are designing a consumer product, with a specific set of functions (authentication) to perform. Surely it makes sense to validate first of all, what these functions are and how best to engage the user in a positive and rewarding experience that inspires confidence, trust and certainty. This is clearly a highly specialised field and in order to navigate the road to a better understanding of this vital subject, the IBDA is extremely fortunate to have partnered with the industry's leading expert in this domain, Professor Jane Raymond. The Importance of Design in the Authentication Process - Understanding the User Experience It’s all about changing the way ‘WE’ see things! Issue 35 Author: Mark Stevenson, President, International Banknote Designers Association (IBDA) COVER STORY
  4. 4. COVER STORY Professor Raymond holds the Chair of Visual Cognition at the School of Psychology, University of Birmingham, UK and is CEO of Secure Perception Research, Ltd. She has been actively engaged in basic and applied research in Experimental Psychology and Cognitive Neuroscience for nearly 30 years and has specific expertise in human perception, selective attention and emotional response. The Importance of Perception testing is widely recognised in many consumer industries. The type of packaging, printing, colours, typeset etc. used can have a fundamental impact on how consumers perceive a product, regardless of what the product actually does or contains. Product and packaging designers invest heavily in consumer perception testing to ensure they are sending the correct messages via their design work. I recently discovered that even garbage bag designers have a significant budget to engineer their product to deliver a better user experience….Wow! When it comes to product authentication and brand protection, the consumer experience is everything. In the world of brand protection and product authentication it is so easy to become comfortable and believe that we are doing the right thing by following technology and bench marking ourselves against other brand owners or …But this is not the right barometer…the sole valid barometer of any significance is the user-experience during the authentication process. The true litmus test to see if we got it right or wrong is not necessarily counterfeit levels, printing costs or waste levels, budget or time lines, but whether the user actually engages its perceptual senses to look at, or feel, the table, packaging or other security device. When designing for product authentication, technology, when practically applied to meet user needs is a good thing but technology, applied for the sake of technology is a waste of resources, space and time The brand protection and authentication industry need to stop and ask themselves honestly… are we doing all this for us or for the user…And if we reach a conclusion that we should be doing it for the user, well then we need to understand the user…We must accept that we are not the user…we are simply too close to the product and have lost our objectivity….We need a wake-up call and we need to take a step back and ask others what they need, expect want and don't want when it comes to inspiring confidence, trust and certainty in a product. And it's not rocket science…A user centered approach to brand protection design is logical and makes common sense…And if you want a simple definition of design usability I quote Steve Krug who says that; 'Usability is about People and how they understand and use things. It is not about technology.’ The brand protection community (brand owners, packaging convertors, security feature developers and security printers, distributors and supply chain security professionals) must step out of their comfort zones and interface with the user, consult the user, open a dialogue with the user and listen. We must become user centered organisations and think differently about every step of our legacy processes…just because it is manufacturable, contains the latest technologies and we think it looks good, does not actually make it good. The only judge here is the user and we must lay aside our preconceived notions of what is good and bad. We must lay aside our subjective opinions for we cannot be fair arbitrators…we are too close to the product, too involved and have too many agendas…. So long as the brand protection and authentication community base the user-engagement/experience on scientific facts and research, they are destined to become better and develop better products. Embracing this philosophy will bring the industry into a new era. Rejecting it will open the door to complacency, myopia and alienation. “We spend a lot time designing the bridge, but not enough time thinking about the people who are crossing it.” –Dr. Prabhjot Singh, Director of Systems Design at the Earth Institute To quote Steve Jobs, ‘You've got to start with the user experience and work back toward the technology – not the other way around.' To find out more about the IBDA, please visit our website : or contact Issue 35 2
  5. 5. Interview with Julian Payne Creative Director, De La Rue Q1: Why design is an important element of Authentication? A: The design of a new currency, passport or security document is so much more than the physical object itself. It is significant and symbolic, evocative and iconic — a cultural statement that respects a proud heritage while looking to the future. It is identity, integrity, a promise. Each design of an individual security document such as a banknote is unique, and banknote design allows for a countries identity and culture to be portrayed by using distinctive icons, symbols and motifs that its citizens can relate to automatically.At De La Rue we begin every design thinking of the end users, how they use and authenticate the notes, identity documents or products, and how we can balance combating security threats with visual aesthetics. Q2: What are the latest trends and developments in designing in terms of color, cultural icons, sizes, patterns, number of anti-counterfeiting features, machine readable features etc.? A: The styles we see in banknote design today range on a continuum ranging between what we describe as 'Linear' which is a more traditional design aesthetic reaching back over 100 years, to 'Leap' which is a lot more cutting edge and is a conscious leap made my central banks to move their currency design into a whole new concept. Linear styles of banknotes, such as the Bank of England notes, have incremental linear change over the years where the layout is maintained and only the technology is updated. Next along is tangent styling where the essence of the note is maintained but with a modern design aesthetic and integrating new technologies. This is very much the 'de-facto' style choice and has increased in popularity over the late 1990's early 2000's. An example of this is the Clydesdale Bank new polymer series. Over the last five years there has been heightened adoption of the use of bold colours and design competitions that allow local artists to feed into the style of their countries new banknotes. There is a growing trend for embracing new technology and moving to a totally new design concept. An example of this is the Maldives Monetary Authority who worked in partnership with De La Rue to radically redefine their banknote style and technology with a theme that reflects the traditions and aspirations of the modern Maldives, as depicted by a local artist who created all of the design concepts for the new series. With more banknote issuing authorities transitioning to polymer banknotes, this also enables increased design flexibility in the use of bolder colours and new innovative security features. Q3: What are important elements a designer should keep in mind while designing solutions for product authentication.? A: It is integral that you design with the existing brand identity and iconography in mind, so that it seamlessly integrates and enhances the product. You also need to make sure you always design for the end user. In the case of banknotes, this is your first line of defence such as the public and retailers, moving through to commercial banks, the central bank and the government. Different end users drive different use cases, impacting the design of the banknote. Design enables users to recognise the value of the note either through visual cues such as numerical's, denomination sizing and colour separation, and also now through touch by the use of tactility on denominations. Design helps to check authenticity through the use bold and easy to find public features, consistent placement of denominationally distinct features, and distinct, integrated UV and teller features. Q4: What should Authorities look while designing a banknote Aesthetic or Security? For example, what should be ideal combination of security features in design? A: Banknotes are arguably some of the world's most well recognised — and iconic — products. An understanding of how these products are used by people — or by machines — and the specific security threats they need to counter throughout their lifetime, directly informs their final design. Our design team works closely with central banks, governments and brands, their stakeholders and end users to deliver a robust, fully secure, functional and aesthetically strong design solution. Feature selection should be driven by the use cases the bank note is likely to face, that is how people use, hold, store or try to counterfeit currency. This is why engagement early in the process is critical. Market and agrarian economies will have use cases that favour hard wearing, bold features to highly automated ones that will demand a balance of public and machine readable features. Equally there are idiosyncrasies in how people treat their money, from wallets to underwear to burial. Understanding the cash cycle and how the notes are performing; their life- cycle, distribution across the country, volume by denomination all help the designer consider the feature choices. Products such as De La Rue Analytics can help provide these critical design insights. An authority should also consider what the note features are there to do, which in short are: a clear signal of note value, authenticity and through it's aesthetic an identity. Q5: How can design incorporate way for digital solutions, do you see any such opportunity? A: Design can be used as part of the user journey and enhancing the overall customer. Within currency, mobiles are increasingly used for public education, often using AR (augmented reality) to bring features to life and explaining what Issue 35 INTERVIEW 3
  6. 6. they do. They are not authenticating a banknote, but are engaging the public and help them to understand what to look out for. Secondly there is a lot more focus now on integrating the physical and the digital seamlessly, for example in authentication where you have digital track and trace solutions that integrate with the physical tokens. This is critical for understanding product provenance and allows officials and even consumers to use mobile apps to scan the secure labels and authenticate the products. Q6: What will be future of banknote design? A.:Heritage and innovation are what make an exciting future for cash. Strong design can create a future that excites and engages the user. Currency has a deep emotional meaning borne of its unique legacy and its continued global relevance. This heritage combined with innovation can create engaging, durable and secure banknotes of the future. Issue 35 INTERVIEW The Authentication Times is the official magazine published by Authentication Solution Providers’ Association (ASPA). The publication offers in-depth analysis, news, research, article and expert opinion on latest developments on Anti- Counterfeiting, Brand Protection, Serialization and Traceability in and out of India. The magazine has a circulation of over 5000 (including digital version) brand owners, industry experts and policy leaders. Diverse technologies, common goal. : : : For advertisement opportunity, please contact Vikram Bhandari +91 7838208944 | email: For editorial enquiry, please contact Chander S Jeena +91 9818971116 | email:
  7. 7. EXPERT ANALYSIS Predicting future banknote designs By a use-centered approach Dr. Hans de Heij De Nederlandsche Bank NV Amsterdam anagers know: Make the right Mdecision and make the decision right. In designer’s language: find the right problem and find the right solution. So, what is the right problem in case of the design of future banknotes? And subsequently, where should central banks find the right solution? Authentication has been an important driver for new banknote designs. Understandable, as there have been three major threats in the history of banknotes, respectively the introduction of photography (around 1850), the rise of offset printing (around 1920) and the Digital Revolution (around 1980). Threats all caused by innovations within graphic reproduction techniques. However, nowadays central banks don’t face such a technical threat, but a usage threat. Still, banknote design is characterised by a technology-driven approach instead of a use-centered one, which puts the user in front. Three models are introduced to underpin the trend towards use- centered banknote designs: Double Diamond Model Pyramid-Model Upid-Model Double Diamond Model Finding the right problem and find the right solution represent the two diamonds of the Double Diamond Model, shown in Figure 1. Both activities first diverge and subsequently converge. Furthermore, both activities have an analytical and a synthesis phase. The central bank is responsible for finding the right design problem, while the banknote designer is responsible for finding the right solution. To support this process the central bank may appoint a knowledgeable banknote designer manager, who start in the first diamond by questioning the problem of a new banknote design and will expand the scope of the problem by focussing on the different usage situations of banknotes. Then the model converges towards a single problem statement, laid down in a Programme of Requirements. The banknote designer operates in the second diamond of the solution activity, also characterised by a phase of diverging before converging and delivering a proposal for a banknote design. In 2007, Buxton summarised this process by ‘Getting the design right and the right design’. Payment methods and banknotes When people make a payment, they use a product like a banknote or a bank card, known as a payment instrument. When you would ask them, what is the function of the banknote or card, people tend to answer with: a means of payment. A wider understanding of a means of payment is a payment method, and Figure 2 provides an overview. With a payment instrument a user has access to a payment channel; a bank card provides access to a bank account and an ATM is part of the payment channel ‘banknotes’. On its turn, a payment channel is part of a payment system, such as non-cash and cash. Non-cash is wider than digital payments, as it includes also coupons, tokens and - still - cheques. In the past there was only cash, but nowadays people have a choice when they want to make a payment. To make this choice they have user criteria, based on user needs. What are these user needs? Pyramid-Model To answer this question, a lead is provided by the well-known theory of Maslow (1943) on the hierarchy of human needs. Originally Maslow discriminated six levels, which are often reduced to the following three: 1) basic needs, 2) psychological needs and 3) self-actualisation needs. Filling Maslow’s pyramid with the user needs of any payment method, results in the Pyramid-Model as shown in Figure 3. The depicted user needs are based on studies of user behaviour concerning payment methods. The first studies reported on descriptive profiles of credit card users (e.g. Etzel, 1968). One of the first to publish a list of attributes, characteristics that determine the user’s preference for a consumer payment system, is Hirschman (1982). A Dutch study on payment behavior by Van der Horst and Cruijsen (2016) delivers a ranking of seven attributes: fast (1), safe (2), easy (3), cheap (4), control of expenses (5), provides privacy (6) and well-accepted (7). A study done to consumer preferences within the Euro Area has been reported by Esselink and Hérnandez (2017), discriminating user preferences between cash and bankcards. What is striking about these studies is that there is no common Issue 35 7
  8. 8. terminology yet. Concepts like security, safe, safety, resilience and reliability are close to each other, yet different. Several studies report on the greatest determinant of a payment system, like convenience for the Danes (Jacobsen and Nielsen, 2011) and ease of use to the Canadians (Arango et al., 2012). At the bottom of the Pyramid-Model the basic user needs are depicted. In the center there is the user need that the payment instrument should be easy to use. Other user needs refer to attributes of the payment method, like access, safety and settlement time. In the center of the middle section of the Pyramid- Model there is the user need that the payment instrument should be nice to have, surrounded by user needs referring to the payment system, like privacy, risk of loss and overview of expenses. In the top of the pyramid is ‘piece of mind’, people want to be happy with their means of payment; above all, it should be hassle free. Upid-Model So, user needs of a payment instrument are divided in ‘easy to use’ and ‘nice to have’, respectively a basic and a psychological user need. Easy to use and nice to have are container concepts and can be divided into more specific user needs with the help of the introduction of user functions. The Upid- Model divides ‘easy to use’ and ‘nice to have’ in respectively four User Interface Functions (UIFs) and six User Experience Functions (UXFs). The terms User Interface Functions and User Experience Functions are derived from the developments within the information technology, especially by the domain of interaction design of screens. User Interface Functions (UIFs) The main user function of a banknote is recognising value (UIF 1). Searching for a banknote in their wallet, people are first of all interested in their value. Also, when they receive a banknote as change, people’s first interest is if the correct denominations are offered. Subsequently, people will take the banknote, arriving at the second function in this category, named handling (UIF 2). People use banknotes to pay each other and not for authenticity self-checks, something central banks sometimes seem to forget. Therefore user functions like value recognition (UIF 1) and handling (UIF 2) are more relevant to the user than checking authenticity (UIF 3). Still, people should be able to do an authenticity self-check, in case they do not trust a banknote at offer. People do want to know what the themes, images and features displayed on a banknote represent (UIF 4). User Interface Functions are the basic user functions of a banknote and have to be fulfilled; if not, the usability score of the note will be low. For the euro banknotes, in 2013, the unweighted score came out on 6.4 on a scale from 1 to 10, obviously room to improve. User Experience Functions (UXFs) The first UXF is recognising identity; people are interested in their own banknotes, not that much in others. Second, within a fraction of time, people have their judgement ready on the aesthetics. They either find the banknote beautiful or ugly. For this reason judging aesthetics is listed as UXF 2. Whether a new design looks like a valuable banknote or a cheap coupon is a matter of keeping confidence, function UXF 3. Furthermore, the main image of the new design is noticed instantly, is it a portrait, a bird or a tower? Reacting on the main image is therefore one more user experience function (UXF 4). Two upcoming User Experience Functions are positioned at the bottom rows. Issue 35 Double Diamond Model Finding the right problem Finding the right solution Divergence Convergence Divergence Convergence TIME ALTERNATIVES Programme of Requirements BANKNOTE BANKNOTE DESIGN MANAGER DESIGNER Figure 1. The Double Diamond Model for banknote design. Originally published in 2005 by the British Design Council as The Double Diamond Design Process Model. Payment systems Payment channels Payment instruments Non-cash Bank account Online banking Debit cards Credit cards Paper forms Not-linked to a bank account Pre-paid cards Online purses Virtual currencies Cash Coins Coin denominations Banknotes Banknote denominations Payment methods Figure 2. Overview of payment methods, divided in payment systems, payment channels and payment instruments. EXPERT ANALYSIS 8
  9. 9. People expect their banknotes to be ‘green’ (UXF 5) and expect that they can check a banknote by using a smartphone or by any other linkage to information technology (UXF 6). When a banknote designer does not pay attention to any of the User Experience Functions people may still be able to use a banknote for a payment. However, when the psychological user needs are also fulfilled, the design will receive a high experience score. Analysing present banknote designs The daily use of banknotes is typically driven by withdrawals from ATMs, wallet use and payments to a retailer or banknote acceptor. Analyses of the User Interface Functions starts with value recognition (UIF 1) and handling (UIF 2). Both can be improved by reducing the number of denominations. Instead of six or seven denominations, central banks may issue three, enough for daily payments, as known from Japan and the United Kingdom. The note-coin boundary will be the lowest ATM note. When the central bank opts for extending the payment denominations with a saving denomination, a high denomination, the number of denominations could be brought to four. To prevent misuse by criminals, such a saving denomination can only be handed in at a controlled environment like a bank. Therefore these notes receive a larger format to prevent its use in machines dedicated to daily payments. Value recognition is further improved by introducing main images (UXF 4) from different image categories. A series should not depict only portraits, or only buildings or birds. Such images may be switched without being noticed and don’t contribute to instant value recognition. Instead, the individual notes of a series should depict a main image from different image categories, as is the case in the recent Norwegian series ‘The Sea’ (first issue in 2017). Handling can be further improved by adaption of size and orientation. Today, people may store some banknotes in the etuis for their smartphones or in card cases. Usually they don’t keep any coins there. These new handling habits will have consequences for the design of future banknotes. Banknote sizes, folded or unfolded, could be adapted to the ‘credit card format’ of 86 mm x 54 mm. A banknote is more-and-more used as a fall back, for example in case a digital payment instrument does not work. In case of wallet use, banknotes are stored horizontally, which is the same orientation of the notes withdrawn from an ATM. As the public does not pay attention to the reverse of a banknote, this horizontal front is the public side, implying that the reverse is the retail side. Retailers keep banknotes often in a vertical position in their cash drawers. A vertical orientation is also required when a banknote is inserted in a payment terminal accepting banknotes, a user situation which will occur more often in the future. Nowadays, almost all currencies have a single note height. Exceptions, among some others, are the euro and the British pound. A single note height of 72 mm, the height of the euro 20, is to the Dutch the most practical one. To assist the blind, the payback denominations should receive an increasing length increment of respectively 7 mm and 8 mm. A shift is expected in future banknote designs from checking authenticity (UIF 3) to retaining confidence (UXF 3), from a focus on public authenticity features to confidence features. Public features were introduced in the 1980s, to involve the public as ‘a first line of defence’ against the spread of counterfeited banknotes. However, the world has changed and to date people do not see any need to execute an authenticity self- check. And they are right. Banknotes withdrawn from an ATM are genuine and do not have to be verified. Furthermore, retailers check incoming banknotes with devices, something that the public sees. And, the probability that the public will receive a low counterfeited denomination is practically zero. So, why should the public do an authenticity check? Issue 35 Figure 3. Pyramid of user needs of any payment method (De Heij, 2018). User needs for any means of payment can be divided in three classes, similar to the ones of Maslow pyramid. The red and the blue represent respectively the basic user needs and the psychological user needs. Pyramid-Model Fixed costs Access Acceptance Image Complexity Privacy Peace of mind Reward programme Happy Risk of loss Variable costs Settlement time Reliability Safety Payment instrument is nice to have Userneeds BasicPsychologicalSelf-actualisation Payment instrument is easy to use Upid-Model User Interface Functions User Experience Functions Recognising value Handling Checking authenticity Receiving the message Recognising identity Judging aesthetics Retaining confidence Connecting with main image Expecting sustainability Linking to information technology Easy to use Basic user functions Nice to have Psychological user functions Figure 4. The Upid-Model (De Heij, 2017) divides the user functions of a payment instrument in User Interface Functions and User Experience Functions. EXPERT ANALYSIS 9
  10. 10. Such a check is only required on special occasions, like in case of case of special festivities or a purchase from a private person on the internet. In such cases people may use an app on their smart phone to check a banknote. The conclusion is that people don’t want to be bothered any longer by authenticity self-checks. Studies in Canada and the Netherlands show that people have a high, stable and increasing trust in banknotes. This implies introduction of public confidence features instead of public security features. Furthermore, public authenticity features should be intuitive and self-explaining. For security features, the focus of central banks should shift to features for the retailer; switch the present level 1 and 2 in retail features (level 1) and public features (level 2). Within the User Experience Functions the focus of central banks is usually on the main image (UXF 4), on what is on the banknote? First, as said above, value recognition will be improved when the main images within a series of banknotes will be based on different image categories. Second, the search for a main image should be triggered by an identity description (UXF 1). Instead of backward symbolism, such as historical persons or building, the trend will be to select images based on forward symbolism. Two examples here. The Swedish central bank replaced the portraits of historical persons by images of people which have a greater appeal to the Swedes, like movie star Greta Garbo. The Bank of Canada reported that Canadians expect their new banknotes to serve ‘today and the years to come’. An important user function in the near future will be green banknotes, as people will expect more than today that their payment instruments are sustainable (UXF 5). Studies on Life Cycle Analysis show that synthetic banknotes are more sustainable than cotton. Finally, future banknotes will have to interact much more with Information Technology, especially with smart phones. An example here is a QR- code, which would link a banknote directly to the website of the central bank, as was done first on a Nigerian banknote of 100 naira, issued in 2014. Also, the banknote number may receive a new role, as banknotes may be verified online, by real time number equation. However, the banknote user’s privacy will be respected, the user will remain anonymous. To improve the machine readability, the banknote number can be replaced by a barcode type. From user functions to design requirements The next step for the central bank’s design manager is to transform the trends observed above into design requirements. In three stages design requirements are derived from user functions by abiding questions about ‘what’ and ‘how’, illustrated in Figure 5. The first step is the transition from user functions into functional requirements, which are, in turn, transformed into user requirements and subsequently into design requirements. Figure 5 provides an example for the user function of ‘retaining confidence’, UXF 3 (what 1). A holographic stripe is the most eye- catching public feature of new banknotes, such as Canada, United Kingdom and the Euro Area; studies on the euro showed that such a stripe contributes more than other features to confidence. The next step is the formulation of the functional requirement, for example ‘confidence strip’ (how 1), which is in this example a wide glossy stripe (what 2). Collected user preferences on such stripes are input for the design requirements (how 2), for example that the stripe should match with the banknote’s value. Figure 6 shows a use-centered banknote design concept, including a confidence stripe. Concluding Banknote design management should invest in user needs. When cash is no longer an attractive payment instrument, banknotes will disappear. User needs will lead to other design requirements as applied today. Furthermore, banknote designers should focus first of all on the User Interface Functions, instead of spending their creativity to User Experience Functions like connecting to a main image. Issue 35 From user functions to design Role of the central bank User functions Role of the designer Functional requirements User requirements Design requirements Design What? How? What? How? Retaining confidence UXF 3 Confidence stripe Silver, glossy stripe On the right side Match with value Complex patterns* 20 mm wide 15 mm from edge Numeral Moving line patterns and colours *The user expects that complex patterns are there for the counterfeiter and do not have to be checked by the user. Figure 5. Schematic representation of the derivation of user functions to design requirements, including an example of the user function ‘retaining confidence’ (UXF 3)'. To arrive at design requirements, functional requirements should be identified first, followed by user requirements. Example of use-centered banknote design Confidence strip Retail side Figure 6. An example of use-centered design of banknotes (De Heij, 2017). These innovative concepts are prepared for an imaginary currency: MAX (Money of Area X). Although they look different, the notes are immediately recognizable as banknotes. These designs include a confidence strip as a result of the shift of UIF 3 to UXF 3. References 1. Maslow, A.H. (1943). A Theory of Human Motivation. Psychological Review 50(4), 370-396. 2. Etzel, M.J. (1968). How Much Does Credit Card Cost the Small Merchant? Journal of Retailing, 47(Summer), 35-39. 3. Hirschman, E. (1982). Consumer payment systems: The relationship of attribute structure to preference and usage. Journal of Business 55(4), 531-545. 4. Buxton, B. (2007). Sketching user experiences. Getting the design right and the right design. Morgan Kaufmann. San Francisco. 5. Jacobsen, J.G.K. and Nielsen, S.T. (2011). Payment habits in Denmark. Danmarks Nationalbank. Monetary Review Quarter 3 Part 1, 125-136. 6. Arango, C., Hogg, D. and Lee, A. (2012). Why is Cash (Still) So Entrenched? Insights from the Bank of Canada’s 2009 Methods-of-Payment Survey. Bank of Canada. Ottowa. 7. Van der Cruijsen, C. and Van der Horst, F. (2016). Payment behaviour: the role of socio-psychological factors. DNB Working Paper, 532. 8. Esselink, H. and Hernández, L. (2017). The use of cash by households in the euro area. Occasional Paper Series, 201. European Central Bank. Frankfurt. 9. De Heij, H. (2017). A Model for Use-centered Design of Payment Instruments Applied on Banknotes. Thesis. Tilburg University. 10. De Heij, H. and reviewed by Brongers, D. (2018). The Upid-Model. A Model for use-centered design of payment instruments applied to banknotes. Keesing Journal of Documents & Identity, 56, 3-7. 11. De Heij, H. (2018). User-friendly banknotes. Infographic. News and trends in payment systems. Newsletter. March 2018. De Nederlandsche Bank. Amsterdam. 12. De Heij, H.A.M. (2018). As people do not check, counterfeiters settle for 50 %. (Conference on) Optical Document Security. San Francisco. 13. Currency News (2018). Three Public Perception Studies Produce Surprising Results. Currency News, 16(3), 10-12. EXPERT ANALYSIS 10
  11. 11. The Evolution of DOVIDs on Banknotes TECHNOLOGY OVERVIEW Holograms, optically variable devices (OVDs), diffractive optically variable devices (DOVDs), diffractive foil features (DFF) or diffractive optically variable image devices (DOVIDs) are the variety of terms used to describe the security features that have become one of the most common, and successful, level 1 (overt) features on banknotes today. To most lay people they are collectively called holograms. This article tracks some of the important milestones in the evolution of DOVIDs on banknotes to the present day. Where did it all begin? I n the beginning there was paper and ink. Thus, began the modern history of the banknote and with it, banknote counterfeiting, leading to the introduction of a watermark in 1697 and, in 1945 an embedded security thread. The next major anti-counterfeiting feature was the introduction in 1984 of a window thread. At Interpol’s 6th International Conference on Currency Counterfeiting (Madrid, 1977), came the first reports of Japanese colour copiers being used to counterfeit currency notes. A year later, Swiss banknote printer Orell Füssli and Landis & Gyr presented a diffractive optical element on a coated paper substrate. This involved the use of a die incorporating a diffractive relief pattern and the use of a letterpress numbering machine (the Numerota from what was then De La Rue Giori and is now KBA-NotaSys). This approach was abandoned three years later in favour of the use of a transfer foil feature added to a paper substrate. At the 7th Interpol conference (Lyon, 1987), SICPA announced that Thailand had taken the first steps to evaluate the use of its Optically Variable Ink (OVI™) on a banknote (the 60 baht). The first major adoption came when, in 1996, the USA decided to use OVI on the $100 bill. 1988 – the Breakthrough However, the challenge remained to create additional products to resist colour copying, and in 1988 the banknote world made a breakthrough. In that year, and at opposite ends of the world, two banknotes were issued that would signal a permanent change to banknote security. In Austria, the high-value 5,000 schilling note appeared with an embossed foil patch of Mozart, produced by Landis & Gyr (now OVD Kinegram), and applied by a Gietz hot stamping machine. In an even bigger departure from convention, and also applied using a Gietz machine, Australia issued a commemorative A$10 note made of biaxially orientated polypropylene (BOPP). This was the world's first polymer banknote and displayed a computer-generated diffractive foil image of Captain Cook in a transparent window. This feature was called Catpix™, a diffraction pattern created by blazing with an electron beam, developed by Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) Division of Chemical Physics. The Catpix technology was developed to overcome degradation of the diffractive image resulting from flexing or crumpling of the banknote during its lifetime. Although the Austrian schilling was subsequently replaced by the euro, and Australia suffered numerous technical problems (17.5 million A$10 notes were manufactured but the ones that went into circulation did not age well), the stage was set for a revolution in banknote security; banknotes with DOVIDs would proliferate as it became clear that the features could not be photocopied, scanned or printed, no matter how refined the equipment. This is because a defining property of The Austrian 5,000 schilling – one of the two first DOVIDS on banknotes in 1988 The 5,000 schilling tilted to the left and the right to reveal different profiles of Mozart. Australia's commemorative A$10 – the world's first polymer banknote, and one of the world's first two banknotes with a DOVID. Issue 35 11
  12. 12. Catpix diffractive Captain Cook foil patch. diffractive foil features is that the colour and imagery is strongly angular dependent – i.e. optically variable. This means that, as the note/diffractive foil is handled, rainbow colours flash in front of the viewer. By comparison, a photocopy (static flatbed copy) of the foil appears lifeless, with no optically variable rainbow effect. The subsequent take-up of diffractive foils on banknotes was slow – the banknote community was cautious, the gestation period for any new banknote features was long and the technology for sophisticated foil features, large-scale production and application was in its infancy. Nevertheless, over the next three decades nearly 100 issuing authorities were to adopt the technology and apply it to just under 300 denominations. Next Milestones 1992, saw the first holographic thread, in the Finnish markkaa. At that time, however, threads could only be inserted into banknotes to a maximum width of 2 mm, which allowed little space for the diffractive effects to be viewed. The development of short-formers in the late 1990s enabled the integration of much wider threads, and hence provided a boost for the deployment of diffractive and other optically variable threads to widths of 6 mm and more. A year later (1993) saw the foundation of the International Hologram Manufacturers Association (IHMA) – which was set up to create a code of conduct for the rapidly-developing industry. The same year it launched the Hologram Image Register, a first-of-its kind initiative to maintain a record of security holograms produced by its members, and the so-called 'jewel' in its crown. A year later in 1994, came the first ® holographic stripe, LEAD (Long-lasting Economical Anti-copy Device), on the Bulgarian leva, arguably a more important development since the majority of holograms are now applied as stripes.1994 also saw Kuwait adopt holograms on three of its denominations. Since then, and in particular towards the end of the decade, there was a tremendous upsurge in the use of DOVIDs on banknotes. This was prompted in part by the increasing use of digital scanners and photocopiers to counterfeit banknotes. It was also promoted by developments in foil production and application technology, which enabled high volumes of foil to be produced cost-effectively and applied at speeds commensurate with normal banknote printing production. This was further supported by the introduction of machines to facilitate the application of foil to banknotes. KBA- NotaSys introduced the OptiNota™H sheet foil application machine for printworks in 1997, while Kurz and Giesecke+Devrient developed web application machines. These enabled paper mills to supply sheeted paper with both threads and holograms, so that printers without their own DOVID application machine could produce banknotes incorporating holograms. Another key development was selective demetallisation, a highly sophisticated technique developed by Kurz in the mid- 1990s which provided a quantum leap in hologram security(only a few companies have the requisite technology). Improved demetallisation techniques also, critically, facilitated the integration of the feature within the overall banknote design, thus making diffractive foil features more acceptable on aesthetic grounds to a traditionally conservative industry. By 2000, DOVIDs – in the form of patches, threads and stripes – were being used on 49 circulating denominations from 27 issuing authorities. Enter the Euro - 2002 Undoubtedly, the most significant driver in the widespread adoption of DOVIDs on banknotes was the first euro series, launched in 2002 and widely recognised as the successful culmination of a very thoroughly researched banknote, from concept to design, followed by a well- planned and executed production and distribution project. The presence and quality of DOVIDs on the euro proved that the technology had truly arrived. Every denomination included a DOVID, with stripes on the three lower denominations (€5, €10 and 20) and patches on the four higher denominations (€50, €100, €200 and €500). The choice of DOVIDS for the new series, their sophistication and their successful application to the banknotes at high speeds was a tremendous vote of confidence in the technology which encouraged other central banks to follow suit. A 20 euro from the first euro series incorporating a demetallised DOVID stripe, and the €100 with a demetallised patch. Issue 35 12 TECHNOLOGY OVERVIEW
  13. 13. The BCEAO's 10,000 banknote incorporating STRAP The European Central Bank (ECB) communicated the salient visual features through an extensive public education campaign using the strapline 'Look, Feel, Tilt', contributing to their success as a secure public feature, and the increasing complexity of imagery to provide high- security has continued unabated. 2003 - New STRAP Features Up until this point, DOVIDs were being applied as patches or stripes, or integrated as threads. In 2003, a fourth type was introduced in the new note series issued by the Banque Centrale des États de l'Afrique de l'Ouest (BCEAO) – the central bank for the West African Monetary Union – namely a new diffractive version of Banque de France's ® STRAP technology. STRAP (Système de Transfert Réfléchissant Anti-Photocopie) is a discontinuous wide surface-applied reflective foil that was first applied to the French franc in 1993 and originally featured reflective metallised elements that turned black in colour copiers. The version used on the BCEAO banknotes incorporated holographic elements that changed their image and colour according to the viewing angle. Another milestone was reached in 2003, when research showed that DOVIDs were now being used on 105 circulating denominations from 47 issuing authorities. Windows in Paper The world's first paper banknote with an OVD aperture was introduced by Bulgaria, which issued a commemorative 20 leva banknote in 2004 with an innovative optically ® complex feature called Varifeye , developed by Louisenthal. The significance of this development was threefold.  First, it marked the advent of windows in paper banknotes, something that had previously been confined to polymer (more of which later).  Second, it was an early example of stripes combining different technologies – diffractive and others – which has subsequently become the norm for stripes on banknotes.  And third, the stripe was applied not as a continuous feature, but in register – again, something that has become the norm for stripes on banknotes. Although diffractive foil features are viewed by reflection, they are actually transmission images rendered suitable for viewing on an opaque background (paper or printed polymer) by means of a reflective metallic coating, usually aluminium. Without the metallic layer, the surface relief image is transparent and capable of showing its rainbow coloured imagery if held up to the light which is allowed to pass through it. It was only a matter of time, therefore, before their use in combination with windows in paper notes would catch on. In 2005 China, which is the world's largest issuer of banknotes, modified its 1999 series with the inclusion of holographic threads. 2006 - Zero Tolerance Demetallisation In 2006, Kurz (owners of OVD Kinegram since 1999), marked the 21st anniversary of the KINEGRAM with the introduction ® of the KINEGRAM zero. zero , based on a new demetallisation process. The name captures the key zero tolerance characteristic of the new process, meaning that the demetallisation is perfectly registered to the diffractive KINEGRAM image – a zero tolerance – compared to the typical tolerance of ±0.5 mm of alternative demetallisation processes. The first application for the KINEGRAM zero. zero was in the Central Bank of Turkey's new series introduced in 2008. That same year, Kurz unveiled ® KINEGRAM reColor , a feature designed for transparent windows in banknotes which displays different images depending on the side of the note from which it is observed. On the front the viewer sees a usual metallised reflective, diffractive image, while the reverse view shows a patterned coloured foil also displaying the diffractive features. The feature uses selective demetallisation to highlight different parts of the images. This feature subsequently led to the ® development of KINEGRAM Colors , which was used on the Bank of England £5 and £10 polymer banknotes in 2016 and 2017 respectively. 2007 - Windows Application In 2007, KBA-NotaSys introduced Opti- ® Windows , a module for its Opti- Nota H foil application system that enables printers to cut a window in a banknote Registered demetallised stripes on the entire banknote series issued by Turkey in 2008. Issue 35 The Bulgarian commemorative 20 leva banknote– the first paper banknote with an OVD aperture, or window 13 TECHNOLOGY OVERVIEW
  14. 14. and then apply a demetallised holographic stripe directly over this window in one pass and in perfect register at speeds of up to 10,000 sheets per hour. Depth, Volume and Magic 2009 saw numerous developments in DOVID technology. De La Rue, in a response to the ® development of Motion , the micro- optical non-diffractive system developed in the US by Nanoventions and acquired by Crane, launched its Depth Image™ hologram, which was adopted by the Clydesdale Bank that year. The feature is claimed to have visible depth, three- dimensionality, strong colour switching and contrast. The Clydesdale notes used patch holograms with a holographic depth of 8 mm. Depth Image was also later adapted for windowed threads and integrated into the Kazakhstan 5,000 Tenge denomination in 2011. Also, in 2009 was the development of volume holograms using photopolymer materials by Kurz for its modular banknote concept. The product was ® called KINEGRAM Volume and it was originally developed as a thin laminate film prior to its subsequent development as a hot stamping foil. This was a significant technical challenge, since to make the material thin enough to be useable on a banknote required a new approach to volume holography, given that the reason this is called a 'volume' hologram is that the interference fringes are recorded within the depth of the photosensitive material. However it took another five years for the first volume hologram to be used on a banknote and a further two years for the combined volume and demetallised stripe to appear on a circulating banknote. In 2010, similar developments took place in Japan, with Dai Nippon Printing (DNP) introducing the first volume hologram windowed thread, although this was used on vouchers rather than banknotes. DNP also unveiled SECUREIMAGE™, a full colour volume (Lippmann) hologram stripe for banknotes. Also in 2009, Louisenthal announced a further development of its Varifeye window product with the incorporation of a micro-optic see-through feature called Magic™, combined in a foil stripe with a diffractive feature. This product featured a year later in the Kazakhstan 1,000 tenge note commemorating Kazakhstan’s presidency of the Organisation for Security and Cooperation in Europe. Registered Stripes and Improved Demetallisation During this time technical advances in foil application machines also saw the introduction of registered diffractive foil stripes. This capability enabled the design within the foil stripes to be placed in exactly the same position on all banknotes in a denomination. One of the first to adopt this was Turkey where their entire series incorporated registered demetallised stripes. This, as above, was the first commercial use of KINEGRAM 2010 - Diffractive Identification Devices ® 2010 saw the introduction of a DID patch on the Philippines 1000 and 500 piso circulating banknotes. DID (Diffractive Identification Device) was produced by SURYS and is what is known as a zero order device (ZOD). ZOD devices have micro-structure relief profiles less than the wavelength of visible light and exhibit a clear colour switch when rotated through 90°. The Return of DOVIDs in Polymer Also in 2010, CCL Secure launched a diffractive feature called Latitude™, that required no separate hot stamping application of foil. Instead, the diffractive DOVID feature is incorporated into the polymer substrate during the manufacturing process and a layer of silver ink applied to provide the reflective layer. The diffractive design is not restricted to patch or stripe formats. The first circulating banknote to feature Latitude was Nicaragua’s 200 córdobas polymer note in 2015. And it brought the incorporation of DOVIDs into polymer full circle, the feature having been dropped after its first use on the commemorative A$10 back in 1988. Clydesdale £10 pound banknote incorporating De La Rue's Depth holographic patch. KINEGRAM Volume combined with KINEGRAM within a single stripe from 2009. Commemorative Kazakstan 1,000 tenge incorporating Varifeye and Magic. DID patch on the Philippines 500 piso banknote. Left image: horizontal view of the banknote. Right image: banknote rotated 90°. Issue 35 Latitude feature on the Nicaraguan 200 Córdobas 14 TECHNOLOGY OVERVIEW
  15. 15. Left: 5,000 ruble banknote incorporating Mobile thread. Right close up of the Mobile thread that utilises refraction rather than diffraction. Europa series €20 banknote incorporating Kinegram Review portrait window technology. It was also the forerunner to a number of new series that were issued over the next five years on polymer, all incorporating DOVIDs, starting with Canada's new Frontier series in 2011. All the notes feature an almost full- length window with a demetallised diffractive foil feature (it was intended that the window should be full length, but this proved to be too difficult for the existing registration systems in production). Also worthy of mention in 2011 is both the Russian and Belorussian upgrades to their 5,000 and 200,000 ruble notes. Both upgraded notes incorporated a new thread feature called Mobile that utilises Fresnel lenses and the phenomenon of refraction (bending of waves, in this case light waves) rather than diffraction. Mobile was developed by Computer Holography Centre and Krypten for the Russian printer and papermaker Goznak. Conveniently, the production processes for this feature exploit existing holographic technologies and equipment for mass reproduction. By 2012, the number of circulation denominations featuring DOVIDs had grown to 247 from 83 issuing authorities. The New Europa Series Around 2009, it became generally known that the second euro series (dubbed the Europa series) would retain DOVIDs but in an enhanced, more integrated form that was not possible for the first series due to the large number of suppliers and some printing works having machinery limitations. After several delays, the new series begin rolling out with the new €5 in 2013, featuring a diffractive stripe as before but this time in register. The €10 followed, and then – in another breakthrough for the industry – the new €20 was issuedin 2015 containing what the European Central Bank (ECB) termed a 'portrait window'. This is a see- through diff active feature that has different visible effect when viewed from the front, reverse and in transmission, as does the more recent new €50. Both ® notes use a KINEGRAM Review stripe developed by Kurz. World's First Plasmogram Also in 2013, SURYS unveiled the Plasmogram™ as an optically variable device for use in the windows of secured documents such as banknotes and ID cards. What distinguishes this device is that it uses surface plasmons to create the image, making SURYS the first company to launch a commercial product which exploited this phenomenon. The underlying scientific principle of Plasmograms is, oddly, that which gives the colours in stained glass, as used for at least 800 years. Stained glass contains small metallic particles incorporated into the glass before it sets; the surface plasmon resonance (the quantum-level phenomenon of light waves travelling through metal at its surface) at the interface between these metal particles and the glass 'filters' the transmitted light so that only one wavelength is released. In stained glass different colours are obtained by using different metals, different glass (thus changing the refractive index at the interface of the two) and different sized particles. The same principle applies to plasmonic optically variable devices. Nano-sized metal particles are deposited onto a thin film substrate comprising nano-holes, so that the film becomes a light filter, allowing only the required wavelength through. By depositing different metals, each allowing through a different colour, images in light can be created. First volume stripe on a circulating banknote The following year saw the world's first volume holographic stripe issued on a circulating banknote with the introduction of the 50 shekel by the Bank of Israel. This note featured the KINEGRAM Volume described earlier. This would be the first of the four newly-designed Israeli denominations to use the feature that produces fundamentally different visual effects than embossed holograms. The 200 shekel was SURYS' Plasmogram window feature on a demonstration banknote Issue 35 The C$20, 50 and 100 polymer banknotes incorporating a diffractive foil demetallised stripe. The Bank of Israel 50 shekel banknote introduced in 2014 incorporating the world's first volume holographic stripe Kinegram Volume. 15 TECHNOLOGY OVERVIEW
  16. 16. The commemorative Armenian 500 dram incorporating RollingStar LEAD stripe introduced in 2015 and the 20 and 100 denominations in 2017. In 2015, the Reserve Bank of New Zealand began to upgrade its polymer notes with a new series called the 'Brighter Money' series that – likethe new Canadian Frontier series – incorporated demetallised DOVID window patches. Enter 2016 with a Suite of Innovations In 2016 SURYS introduced two new features – DID Wave™ and DID Virtual™– on the new commemorative 20 zloty note, produced by Polish Security Printing Works (PWPW). DID Wave incorporates colour permutation and animation motion effect whilst DID Virtual incorporates colour permutation and surface relief 3D embossing effect SURYS developed these features by incorporating the zero order DID technology with fresnel-type lenses. In another first, the Swiss National Bank (SNB) launched its new banknote series (the ninth) with the issue of the new 50 Swiss franc note that incorporated a two colour KINEGRAM Volume foil stripe combined with a partially metallised KINEGRAM provided by Kurz. To date, CHF 10, 20, 50 and 200 notes have now been issued. The remaining notes in the series will also include this feature. In the same year, Kurz unveiled another innovation – KINEGRAM Colors, which was a development of its KINEGRAM Recolor technology and was a departure from conventional DOVIDS. These are normally available in one colour (mostly silver, sometimes gold). Kurz' development allowed for the incorporation of multiple colours in the foil in perfect register to the partial metallisation, and it received its debut that same year when, in September 2016, the Bank of England issued its new £5 polymer banknote with a KINEGRAM Colors foil stripe. The polymer £10 followed in 2017 which also featured KINEGRAM Colors. Virtually simultaneously in September 2016, on the other side of the world, the Reserve Bank of Australia launched its new polymer series, starting with the A$5 banknote, followed a year later by the new A$10, which feature a wide top- to-bottom stripe containing a DOVID. Not to be outdone, the Russian company Krypten unveiled a suite of new thread innovations in 2016 that included two volume holographic threads: 3D-Gram- M, available in green and red, and 3D- Gram-C (C standing for colour), where the colours have been increased from two to three – green, red and blue. More Innovation and Endorsements in 2017 Having enjoyed success with its ® RollingStar micro-mirror technology incorporated into banknote threads, Louisenthal evolved its technology into an eye-catching transfer foil called ® RollingStar LEAD. The transfer foil combines holographic, micro-mirrors and colour shift technologies into a single product and it made its debut in the Armenian 500 dram commemorative note in 2017. Louisenthal has long been an innovator of secure windows in paper banknotes and, even more recently, launchedan ® enhanced feature called varifeye ColourChange, which works in combination with the properties of the RollingStar LEAD transfer foil for translucent and transparent windows and also on its own as a patch. In another world first in 2017, the National Bank of Kyrgyzstan issued a The image of the DID Wave and DID Virtual features that portrays a part of a relief of the Gniezno Cathedral doors on the commemorative 20 zloty banknote. ® The CHF 50 banknote printed on Landquarts Durasafe substrate and featuring the two colour Kinegram Volume stripe incorporating partially metallised Kinegram. The front of the Bank of England's new £5 note, incorporating showing a KINEGRAM Colors stripe in the window area. The front of the new $5 Australian banknote An example of Krypten's 3D-Gram-C thread that can incorporate three colours. An example of varifeye ColourChange Patch in a window. Left: Gold coloured in reflected light. Right: Blue colour in transmitted light. Issue 35 The NZ$5 banknote introduced in 2015 incorporating a demetallised diffractive foil window patch. 16 TECHNOLOGY OVERVIEW
  17. 17. new 2,000 som commemorative paper banknote featuring KINEGRAM Colors from Kurz applied for the first time as a patch. It comprised three distinct metal colours – gold, green and blue – taking the form of a traditional Kyrgyz yurt. In this instance, the distinction is in the variety of colours and not the combination of the feature with a window. That same year, De La Rue introduced TrueImage™, a DOVID feature for polymer banknotes based on advanced plane (classical) holography that was a development of its Depth Image technology. The result is 3D photorealistic imagery with cinematographic animation effects which is ideal for polymer since the smooth surface does not disrupt the replay of the image sequence. Resurgence of Patches In another major endorsement of the use of DOVIDs, in 2017 the Reserve Bank of India sent out a Global Pre- Qualification Bid Notice (PQBN) for the supply of up to 8 billion foil patches per year. As the largest banknote issuer after China, this will increase the volumes of DOVIDs produced for banknotes each year exponentially. At the end of 2017, the number of banknotes with DOVIDs stood at 293. The DOVID has come a long way since its earliest application in the window of the A$10 and as a patch on the Austrian 500 schilling. From a simple patch format added, some would say, as an 'afterthought', the DOVID is now a fully- integrated security feature, applied in register with complex effects, more often than not combined with complementary optical features, and producing a whole new range of effects due to its combination in windows in paper as well as polymer banknotes. The preponderance of threads versus patches versus stripes has changed over the years, with the use of diffractive threads declining markedly, and stripes overtaking patches. A clear trend in recent years, and one of the drivers for the ascendancy of the stripe, has been the combination of the window with DOVIDs. In the case of paper, this has – until now –been confined to stripes. But in 2018, ® Kurz launched KINEGRAM APL , which enables printers to create windows with DOVID features applied as patches. Examples of Kinegram APL with Kinegram, Kinegram Colors, Flux effect, Kinegram Volume, Kinegram HDM and Kinegram Review on the The Essential Element house note series. With this latest development, patches are likely to make a resurgence. But whether as a stripe or a patch (or even, in some cases, still a thread), the opportunities for DOVIDs in banknotes going forward are stronger than ever. Europa series completes More recently the European Central Bank launched the new €100 and €200 banknotes incorporated portrait windows and a new satellite hologram. The new notes have the same integrated design as the €5, €10, €20 and 50 with the printed features and the watermark being repeated in a foil stripe. And, like the €20 and €50 – the new €100 and €200 also incorporate a stripe with a 'portrait window'/foil combination. However, these latest denominations also include a new 'satellite hologram.' The new satellite feature is located in the top section of the stripe (above the portrait window) for both denominations and shows small € symbols which move around the denomination number and become clearer under direct light. What do the numbers say? 1988 was a watershed year for DOVIDs – being the year that saw its launch on two banknotes on opposite sides of the world. The growth thereafter was slow – another six years were to pass before a holographic thread made its debut in Finland, and eight years before it was used on Kuwait's banknotes and as a stripe for the Bulgarian lev. During the 1990s there was nevertheless a steady increase, and by 2000, 49 denominations from 27 issuers featured DOVIDs. The real shot in the arm for DOVIDS came with the launch of the euro. This was launched in 2002, but the preparation and production started in the late 1990s, at which time it was known that all denominations would feature a DOVID. Not only was this a ringing endorsement for the technology, but the suppliers – printers, papermakers and DOVID Examples of Kinegram APL with Kinegram, Kinegram Colors, Flux effect, Kinegram Volume, Kinegram HDM and Kinegram Review on the The Essential Element house note series. Europa €100 An example of the new 'satellite hologram' feature on the €100 banknote Issue 35 17 TECHNOLOGY OVERVIEW
  18. 18. producers themselves – had all invested heavily in technology and capacity to produce the 14 billion or so banknotes required for the launch. They therefore had the means – and also, as became apparent following the launch – the incentive since, in the immediate years following the launch, volumes fell dramatically, resulting in huge over- capacity. By 2003, DOVIDS were being used on 105 denominations from 47 issuing authorities. Four years later, the number had jumped to 176 denominations from 69 authorities (a 67% increase). For the rest of the decade, these numbers continued to climb but more slowly. By 2012, the corresponding figures were 247 denominations from 83 issuers (a more modest 40% increase). By the end of 2017, the number of denomination had increased by 20% to 293 from 92 issuers. During this period, and the latter half of the last decade in particular, a number of other optically variable technologies were making their debut – notably ® ® MOTION from Crane and SPARK from SICPA, along with a host of new colour- shifting effects Would these end up displacing DOVIDs? And is the DOVID running out of steam? Far from it. One of the factors in the success of the DOVID industry is its ability to innovate and reinvent itself. Its continuing growth in the face of a panoply of alternatives continued. The article was taken from the Diffractive Features on Banknotes 2018 special report published by Currency ® News . Dr Mark Deakes, Director of Optical & Authentication Technologies (Reconnaissance International), General Secretary of the International Hologram Manufacturers Association (IHMA) and ® Editor of Holography News and ® Authentication News 350 300 250 200 150 100 50 0 Year Noofbanknotes/Issuers 2000 Thread,Patch&Stripe 2003 2007 2012 2017 140 120 100 80 60 40 20 0 Number of Banknotes with DOVIDs Number of Banknotes No of issuers Thread Patch Stripe Issue 35 18 TECHNOLOGY OVERVIEW
  19. 19. Issue 35 GUEST ARTICLE Decoding three factors behind the growth of anti-counterfeit market in India By Ankit Gupta, Director Holostik Group BIthe top-notch U.S agency has Flabelled counterfeiting as the 'Crime of 21st Century' and it's not a surprise. No doubt, counterfeiting or duplication is a menace which has jolted economies across the world and India is no exception. According to IMF (International Monetary Fund), “Indian economy is witnessing a steady growth due to the implementation of several noteworthy policies. Economic growth is expected to pick up to about 7.3 % for the fiscal year 2018-19.” The growth is commendable, but what about the growing market of counterfeits? The implications of counterfeiting are many, from revenue loss of exchequer to undermining foreign investment, loss of jobs to rise of criminal activities and much more. A FICCI CASCADE report states that the total loss to the government due to illicit markets in just seven manufacturing sectors was Rs. 39,239 crores in 2014. However, India is witnessing winds of change and anti-counterfeiting measures are being taken on many fronts. Moreover, with new innovations in anti-counterfeiting technology, implementation of new regulations and a rise of social awareness, days of counterfeiting seem to be numbered. In order to understand why this is the perfect time for anti-counterfeit market in India let's discuss three factors directly favouring its growth. Socio-Economic Stature India got independence in the year 1947 and in the following years, for nearly five to six decades, a large part of population was struggling for the basic necessities of roti (food), kapda (clothes) and makan(house). It was only in the past decade that a common Indian could think of buying a branded product and worry over its genuineness. Of late, there has been a rise in the spending capacity of an average Indian. The luxuries of the past have become the necessities of today. Despite the shadow of economic uncertainties, rising inflation, unemployment and other such issues the socio-economic stature of common men has improved. Consumers are spending money on new innovative products and services. Along with this, there has been a considerable increase in brand awareness. Consumers of today are living in an information age. They instantly come to know about any small or big news related to counterfeiting. Countries with high socio-economic stature also have forums and NGOs which helps to raise awareness about the problem of counterfeiting. A high socio-economic stature makes the consumer aware about the latest anti-counterfeiting technologies which can be efficiently used to differentiate between fake and original products. It also creates health awareness among consumers due to which manufacturing companies have to adopt anti- counterfeiting measures so that any fake or spurious product may not reach in the market. Regulations In India, there is no law which specifically governs counterfeiting. The problem is largely dealt under Intellectual Property laws as it violates the IPR (Intellectual Property Rights) of the victim. One of its examples is the Trademarks Act 1999 which provides measures against offenders who falsely apply trademarks. The act allows the 19
  20. 20. Issue 35 owner of a trademark to file a suit against infringement. The Copyright Act 1957 provides the authority to police officers to go ahead with the investigation by seizing all fake items. Some other acts which provide legal remedies against counterfeiting are The Patents Act 1970, Indian Penal Code 1860, The Customs Act, 1962, The Drugs and Cosmetics Act 1940 and the Consumer Protection Act 1986. Due to the change in economic situation of the country and to curtail illegal practices, old laws and regulations are being replaced or modified to suit the present times. A case in point is the Consumer Protection Bill 2018 which will soon replace the Consumer Protection Act. The bill empowers the Central government to take steps against unfair trade practices in e- commerce.The bill also introduces the provision of product liability through which a consumer can take product liability action against the manufacturer for the harm caused to him or her due to the defective product or any deficiency. This will indeed bring down the number of spurious/fake/adulterated products which are being sold online. To strengthen anti-counterfeiting in the Indian pharmaceutical industry, the Health Ministry had launched a reward program. According to a news published in Washington post the Indian Health Ministry had launched a program in which it offered a whopping amount of Rs 4047175 ($55000)to those who provided information about fake drug syndicates. Besides this, CDSCO (Central Drugs Standard Control Organization) is on the verge of implementing a track and trace mechanism for prominent drug manufacturing companies which are most susceptible to counterfeiting. The implementation of such regulatory measures has created a cohesive environment where anti-counterfeiting technology can be implemented efficiently with the support of all stakeholders. Demand for anti- counterfeiting technology is bound to grow due to forthcoming laws and regulations related to counterfeiting. Technology Technology plays a decisive role in anti- counterfeiting. Perhaps, the most revolutionary change in anti- counterfeiting technology is due to the evolution of smart phones. Smart mobile phones have empowered the consumer to instantly authenticate a product, in a grocery store or a super market, with much convenience. Today's smart phones can read optical data, scan QR codes, sendSMS & WhatsApp message for determining the genuineness of a product. It would be right to say that the power of instant authentication has reached in the hands of common man, which was far from reality some years ago. It is due to constant evolution of anti- counterfeiting technology that products and brands have become much more secure against duplication. In the current scenario easy availability of cheap forgery technology has forced manufacturing companies to adopt advanced authentication measures which safeguard against monetary losses and protect brand value in the long run. Anti-counterfeithas become a big industry globally. According to a report published by MarketsandMarkets, “The anti-counterfeit packaging market size is projected to grow from USD 107.26 Billion in 2016 to reach USD 206.57 Billion by 2021, at a CAGR of 14.0%”. In India alone, the anti-counterfeit solutions market is worth Rs 2000 crores and is growing at a rate of 15-20 % every year as claimed by the New Indian Express. According to ISO 12931, there are various authentication technologies available in the market which can be classified as overt, covert, forensic and digital. However, the holographic authentication technology still rules the roost in anti- counterfeit market and is witnessing many new innovations. Security holograms have recently incorporated the power of Nano-Optics. Nano optic material is one thousand times smaller than a human hair. It manipulates light on the nanoscale to produce 3D- holographic effects. The feature is impossible to replicate even with the use of most advanced technology. There is a high demand for anti- counterfeiting packaging technology in the food and beverages segment.There is also a rise in the use of track and trace technology for securing entire supply chains. Authentication technologies utilizing QR codes and bar codes are also witnessing a wide spread use in many industries. Conclusion From the above-mentioned points, it can be concluded that the present scenario is ideal for the implementation of anti- counterfeiting products and solutions. Due to rapid urbanization and industrialization there is a high potential for the growth of anti-counterfeit industry. Moreover, the entry of block-chain and artificial intelligence technologies in anti-counterfeit market will be revolutionary. But, this does not mean that they will replace the prevalent holographic authentication solutions instead, they will amalgamate to provide a multi-layered security approach. In the coming years, the two entirely different technologies will not compete but will complement each other. With enough support of the government, market players and the consumers anti- counterfeit market is going to witness a humungous growth in the coming years. GUEST ARTICLE 20
  21. 21. Trends and Drivers in Tax Stamp Design and Security By Nicola Sudan, General Secretary, International Tax Stamp Association hat does an excise tax stamp Wlook like today, compared to what it used to look like… and what it may look like tomorrow? What are the drivers that have shaped the modern tax stamp and what are the individual parts of that stamp that make up the whole? These are the questions addressed in this special feature, devoted to the evolution in the design, as well as in the security features and functionality of tax stamps – since all these elements are inextricably linked. Fifty years ago, tax stamps were nothing more than simple pieces of printed paper, with little or no security and no serialisation. They served as tax collection tools as well as physical proof that the correct tax had been paid on the product the stamps were affixed to. Today, however, as a result of various fiscal, regulatory, normative and socio- economic developments –combined with technological innovations in security printing, serialised coding, data processing and mobile communications – tax stamps have transformed into sophisticated devices with additional roles relating to product authentication and supply chain security. To put the evolution of tax stamps into perspective, let's quickly go back to how the first tax stamps looked, all those hundreds of years ago. The origin of tax stamps dates back to 1637, when Spain was the first country to introduce stamped paper. These early documents were too large to affix to the taxable item itself, but evolved into easily attachable adhesive labels that resembled postage stamps, as well as long, thin banderoles for wrapping over alcohol bottlenecks. Even at an early stage in their existence, tax stamps took on additional roles – albeit unintentionally – just by the fact of being attached to a product. As well as providing visible proof of tax payment, their very presence acted, to some extent, as a guarantee that the product was genuine. Furthermore, by being positioned over the opening of a tobacco package or alcohol bottle, they acted as an anti-tampering/anti-reuse seal. Tax stamps were originally used on a wide range of products, but became progressively less common in the latter half of the 20th century, with the exception of tobacco and alcohol. In these sectors their use has grown, particularly in more recent times where technological developments have made both the identification of individual items, and the recording and monitoring of revenues collected on them, much easier to manage. Evolutionary drivers So what has driven the tax stamp to become the sophisticated security device it is today? One of the earliest developments related to the progressive, and sometimes dramatic, increases in tobacco excise taxes, implemented by many A few 'old timer' tobacco and alcohol stamps. Issue 35 TRENDS 21
  22. 22. governments in a bid to reduce national consumption and raise revenues. As excise taxes grew, so did the value of the stamps representing them. This, in turn, made it more worthwhile for criminals to produce counterfeit stamps for the purpose of disguising illicit, untaxed product. This phenomenon led to the need for stamps to carry robust, visible security features – much like those on a banknote – to distinguish them from fake stamps. But what had been considered robust before the digitalisation era (which began in the 1980s) was not necessarily considered so there after. The digital age saw the advent of low-cost, mass- marketdigital reproduction technology which, while revolutionising the modern printing industry, had the negative effect of providing counterfeiters with affordable tools for producing high- quality counterfeits. Tax stamps, banknotes and other security documents had to counter these new threats by adopting security features that could not be copied or in any way simulated by conventional reprographic methods (including scanners and desktop printers). The most notable of such features were the hologram and optically variable inks, which today feature on a vast number of tax stamps. Another technological driver that changed the face of tax stamps related to track and trace systems. The development of digital reproduction technology was accompanied by major breakthroughs in both data processing capability and mobile communications. As a result, products can today be marked in-line during production with their own unique identifiers that are recorded in a database. These identifying codes may then be used to verify the product in remote locations and provide key data on source, destination and authenticity. The ability of tax stamp issuers and others involved in tax stamp programmes to monitor and record complex supply chain data in real time is something that could only have been dreamt of a few decades ago. Other drivers that are influencing the design and construction of tax stamps – at least those for tobacco – are international regulations, the most extensive of which is the WHO's global Framework Convention on Tobacco Control (FCTC) and its Protocol to Eliminate Illicit Trade in Tobacco Products. The FCTC is not concerned with tax collection and tax stamps as such, but it does require its parties to implement, by 2023, aglobal tracking and tracing regime, using 'unique, secure and non- removable identification markings such as codes or stamps', that are applied to each cigarette pack. Another regulation is the EU Tobacco Products Directive (TPD), passed in early 2014 for implementation in May 2019, which has authentication and supply chain control as its primary objectives – and not tax recovery. Like the WHO treaty, the EU TPD requires all cigarette packs to be marked with a printed or affixed unique identifier. Unlike the treaty, it requires packs to include a tamper-proof printed or affixed security feature composed of no less than five authentication elements, at least one of which must be overt, one semi-covert, and one covert. Given that both the WHO FCTC and the EU TPD are not concerned with tax collection as a primary objective, it comes as no surprise that neither one of them has mandated the use of tax stamps as a carrier for the unique identifier and security features. But given that a significant number of countries use excise stamps anyway, there is no reason why the stamp could not be used for all three functions: tax collection, authenticity and track and trace. Indeed, some EU member states have already decided to use their existing tax stamps to meet the security feature requirements of the TPD – and eventually the FCTC Protocol – even though some stamps may need to be updated in order to comply with these requirements. It remains to be seen, however, how many member states will also use the stamps as a carrier of the unique identifier required for track and trace, or whether they will opt for the less secure method of having the manufacturer apply it directly on the cigarette pack, separately to the security features. A new driver in town And now there is a new driver 'in town', in the shape of the soon-to-be- published ISO 22382 standard for the content, security, issuance and examination of excise tax stamps. Among other roles, this standard has been created (with the support of the International Tax Stamp Association) to guide tax authorities on the design, construction, security and serialisation of tax stamps, and should therefore prove to be influential in shaping tax stamps of the future. Specifically, the standard advises tax authorities to consider all components of the stamp– and not just what's going to be printed on it – when deciding on its construction. This includes the substrate, ink, adhesive, security features and unique identifier. Furthermore, authorities are advised to use a combination of layered authentication features – at overt and covert level – when designing the stamps. Several disciplines contribute Issue 35 TRENDS 22
  23. 23. to this combination, advises the standard, including:  Graphical security designs that are difficult to replicate;  Chemistry in the choice of inks, lacquers and adhesives;  Material science in the substrate and adhesive;  Optics in the optically variable devices;  Encoding for the unique identifier (UID). The standard also advises the tax authority to bear in mind that a printed UID that is not associated with one or more authentication features or not protected against replication cannot provide authentication. The standard then goes on to highlight the following best-practice techniques that raise the barrier to fraud and recommends that authorities incorporate at least some of these in their tax stamp design:  Graphical security designs;  Complexity in the design and processes required to print the stamp;  A combination of printing tools and methods, especially in the small space usually available on a tax stamp;  The registration of different parts of a design, including graphic and security features, within tight tolerances;  The use of specialist techniques and expertise that are difficult for criminals to source. Then with regard to the type of UID used, the standard advises authorities to decide at an early stage in the stamp specification process: how the UID will be used, what it will contain, how it will be generated and how it will be integrated in the stamp. Once this is clear, the authorities will be able to decide, for instance, whether they want to use a plain-text human-readable UID only, or a machine-readable barcode – or both. Examples of stamps that fit with the norms and laws So how does all this advice and all these regulations translate into concrete examples of tax stamps? Below are some samples that incorporate both the recommended components of ISO 22382 and the TPD's required security features and UID for track and trace. It is important to note, however that, as far as the TPD is concerned, the below samples represent optimum levels of security and independence from the tobacco industry (in that the security features and UID are produced by third- party suppliers),and that the TPD is actually flawed in the sense that it allows the tobacco industry to mostly produce its own security features and control the encoding and application of the UID onto the product. Such control by the tobacco industry is in severe contravention of the FCTC Protocol, which allows only a strict minimum of tasks to be delegated to the industry. Therefore, the below examples serve to reflect both the spirit and letter of the Protocol and should be especially borne in mind by all countries that are party to it. Example 1: This example includes: At least five authentication elements for product authentication, composed of printed and material-based security:  Overt – 3D holographic effect;  Overt – metallic aspect with colour- change;  Semi-covert – polarisation effect;  Semi-covert – high-definition micro- image and authentication of the hologram with a smartphone;  Covert – nano-images;  Other – deliberate faults; Tamper-evidence: frangible substrate that is destroyed upon attempting to remove the stamp; UID in the form of a visible alphanumeric sequence which is also encoded into the QR code. Apart from the UI, the QR code contains (or links to) the product's date of manufacture, tax level, order reference and product details. Example 2: This example includes: At least five authentication elements for product authentication, composed of printed and material-based security:  Overt – colour-shifting ink in two places: the 'SRI' logo and within the QR code;  Overt – fine-line definition;  Overt – latent image;  Semi-covert – double polarisation properties of colour-shifting ink, authenticated with a low-cost credit card-sized polarisation filter;  Semi-covert – UV ink;  Covert – forensic marker that can be authenticated using specialised laboratory equipment; Tamper-evidence: frangible substrate that is destroyed upon attempting to remove the stamp; UID in the form of a visible alphanumeric sequence. The UID is also encoded into a QR code which casual inspectors, including consumers, can verify with their smart phone, as well as into an encrypted DataMatrix code for use by officials with dedicated devices. Example 3 (based on the EU eIDAS regulation): This sample is based on an EU regulation called eIDAS (Electronic Issue 35 TRENDS 23
  24. 24. Identity Authentication and eSignature) which came into force in January 2018. eIDAS provides a common foundation for the use of electronic signatures and seals, thereby improving trust in cross- border electronic transactions in the EU internal market. Although this sample refers to an EU situation, its principles could be applied to other geographical regions faced with similar challenges. As far its use on a tax stamp is concerned, the electronic signature of the independent UID issuer would be incorporated into a large DataMatrix code (as shown on the right side of the above images), to provide proof that the UID is valid. The code (which is called a Visible Digital Seal)can also carry the UID itself, which is then matched against the UID in the alphanumeric sequence and second barcode on the left side of the above images (obviously it should be the same UID in each case). Something else that the Visible Digital Seal (VDS) can carry is a trusted link to descriptions of the physical security features carried on the stamp, which inspectors can access without connecting to a database. This is especially useful in regions where no two countries use the same stamps with the same features in the same position (which is basically every region in the world). Access to the information in the barcode is made via a Trusted Entry Point, in the form of a smart phone app, which scans the code, checks the integrity of the data and links to the description of the security features, thus making the inspector's job so much easier. Although a solution of this kind has not yet been implemented in the EU, the principles of such a solution have been recognised in some quarters and are currently being assessed. What else is out there? The above examples represent what the International Tax Stamp Association, standards authorities and other stakeholders consider to be among the best combination of features to assure a high level of security, independence and interoperability, as well as an effective system for track and trace. By comparison, other examples which are currently in use but which don't necessarily tick all the boxes (or which, on the other hand, add new boxes that are not necessarily needed) include the following: Tracking labels for cannabis plants in Colorado. These are not your traditional tax stamp in that they don't denote any tax value paid. Furthermore, their apparent lack of physical security features puts them at risk of being counterfeited. However what they do use is a very effective RFID technology which allows a fast and labour-efficient system for scanning and tracking a roomful of plants; Another tax stamp that uses RFID is the fur label used to protect and track fur garments in Russia and the rest of the Eurasian Economic Union. This label has it all: the electronic and digital features of the label have been combined with physical security features that include microtext, metallic paint, a security thread with a central window and latent image, and an invisible, UV-luminescing feature. Apart from an RFID tag, the label also carries a linear barcode (with corresponding alphanumeric string for human readability), as well as a QR code. Together, these various elements provide the label with three different, open standard carriers for unique identification. RFID has often been touted as a track and trace technology for tobacco and spirits, through application to either the packs/labels, or the tax stamps… and just as quickly dismissed, due to the cost and bulk of microchips, which render them unsuitable for high-volume products. Although developments in printed micro-circuitry may eventually lead to the use of RFID on tobacco and spirits, this is yet to happen on a widespread scale, and may even be considered unnecessary – unlike the above situation in Colorado where roomfuls of densely stacked little plants needed individual scanning. And then we have the winner of the award for the least secure tax stamp - which goes to New Delhi. The label used by Delhi Excise Department is a very plain, purely digital affair that seems to go to the opposite extreme of its full-face hologram predecessor. It is devoid of colour, as well as of any printed or material-based overt or covert security features for physical authentication. There is no way Issue 35 TRENDS 24
  25. 25. of telling, just by looking at the label, whether it is a fake, unless it happens to be sitting next to a label with an identical code. This lack of visible security is one reason why duplicates have been able to slip into the market so easily, and the label therefore provides an excellent example of how not to produce a fraud-proof tax stamp. Is the future all-digital? Looking now to the future, what kind of tax stamps will we be using in five, ten, even 50 years time? For instance, will we eventually only use stamps that are applied directly to the product in the form of a code, and without any physical security? Although directly printed tax stamps, in the form of human-readable alphanumeric sequences and machine- readable 2D barcodes, are already in use (such as on beer products, for instance), these stamps are generally printed with anti-copy or other security inks. If they weren't, the stamps would be vulnerable to cloning, with the result that it would be almost impossible to distinguish genuine codes from clones. Indeed, ISO 22382 advises: 'As direct marking does not offer the variety of authentication features that can be built into a separate tax stamp, the tax authority should require the use of security methods, including inks and other consumables, that incorporate overt and covert components.’  So for now it seems that the most secure way of producing tax stamps is to combine digital and multi-level physical features into a coherent whole on a label substrate. Maybe the day when smartphones are able to do the job of the human senses by recognising and validating authentication features to a very high degree of speed and accuracy, we will be able to do away with overt features completely and put all our faith in electronic devices to tell us what's real and what isn't. But we're not there yet. And at the end of the day, we'll never be 100% digital, will we, unless excise products themselves also become digital – or virtual? And what does 100% digital even mean? Because even a computer-generated code applied by a digital printing method, still has a physical, material element to it, in that it is applied by toner or ink to the product. As far as purely digital technologies are concerned, one could say that blockchain (yes, that buzzword, again) is a digital technology that could be used for secure track and trace by providing an immutable audit trail of supply chain transactions for a particular item. But what blockchain currently can't do is bridge the gap – or 'last mile' – between the digital record pertaining to a physical item, and the item itself. In other words, blockchain cannot help us ensure that the digital record, however immutable and verifiable it may be, is linked to the right object. In order to create that link, a secure unique identifier still needs to be attached to that object – in the form of a physical tag, such as a tax stamp, or even an embedded microchip. 'And this is where blockchain falls down,' claims a Harvard Business Review article (see TSN July 2018), because 'at the interface between the offline world and its digital representation, the usefulness of the technology still critically depends on trusted intermediaries to effectively bridge the last mile.' In other words, it depends on 'flesh-and- blood' human beings to accurately and honestly match the object to its digital record. And what it also depends on are physical security features – verified by human beings – to distinguish genuine unique identifers from clones. The article concludes by saying: 'as the ecosystem around blockchain technology develops, new types of intermediaries will emerge that turn the last-mile problem of keeping digital records in sync with their offline counterparts, into actual business opportunities. While the technology is early stage, as these key complements mature, blockchain has the potential to fundamentally reshape ownership over digital data, and the digital platforms we use every day'. Interesting times! Issue 35 TRENDS 25